Mortgage Broker and Mortgage Banker

When you work on your application for a mortgage , you may work with a mortgage banker or you may choose to work with a mortgage broker. Because a new home is the outcome of the work of both mortgage broker and mortgage banker, it's common to confuse the two. However, understanding how they differ will be useful to your mortgage process.

About Mortgage Brokers

During the mortgage loan process, an individual or firm who is an independent agent for the mortgage loan borrower as well as the lender is a mortgage broker. Your mortgage broker will stand as coordinator between you and the lending institution; which may be a bank, trust company, credit union, mortgage corporation, finance company or even a private investor. A mortgage broker will analyze your financial situation to determine which lender is the right fit for you. You deliver your application to your broker, who presents it to one or more lenders. Your mortgage broker then guides your work with the lender of choice until closing. The borrower pays a commission to the broker if the loan closes.

Loan Officers

Mortgage Bankers represent a particular lending institution (such as a bank) who work with mortgages and other loan programs from their company alone. They may have the ability to promote loans to fit many different situations, but all the loans will be products from the same lender.

A loan officer (also known as an "account executive" or "loan representative") represents the borrower to the lender. The borrower is walked through the entire process, from loan selection to closing, by the loan officer. Mortgage bankers may be paid a commission or salary for their work by their employers.