Mortgage Broker and Mortgage Banker

Either a mortgage broker or a loan officer can work with you when you need a mortgage loan. As both a mortgage broker and lending officer will help you fund a new home, it's common to confuse them. Yet it will be useful to know the ways they differ so you know what to expect from them as you enter your mortgage application process.

About Mortgage Brokers

During the mortgage loan process, an individual or group who is an independent agent for the mortgage loan applicant as well as the lender is a mortgage broker. A mortgage broker coordinates things for you and your lender, which can be one of the following: a credit union, bank, trust company, finance company, mortgage corporation or even an individual, private investor. Acting as a facilitator between you and your lender, your mortgage broker can match you with a credit union, bank, trust company, finance company, mortgage corporation or even a private investor. A mortgage broker will review your numbers to find out which lender is the right fit for you. Your broker will present your loan application to a handful of lenders, and works with the lender of choice until the loan closes. The borrower gives a commission to the broker at closing.

What is a Mortgage Banker?

Lending Institutions (banks, finance companies, and others) employ loan officers to market, and process loans from that specific institution alone. While a loan officer may offer quite a range of loans, they all are products of that specific lender.

Also called a "loan representative" or "account executive," a mortgage banker represents the borrower to the lending institution. A loan officer will guide the borrower through the application, processing and closing of the loan. Lending institutions compensate their loan officers with a commission or salary.