Know what to expect: Mortgage Brokers and Mortgage Bankers

When you work on your application for a mortgage loan, you should know the difference between a loan officer and a mortgage broker. Because both a mortgage broker and lending officer will help you purchase a new home, people often confuse them. Yet understanding how they are different will be helpful to the mortgage process.

Mortgage Brokers

During the mortgage loan process, an individual or firm who is an independent agent for both mortgage loan applicant and lender is a mortgage broker. Your mortgage broker will stand as coordinator between you and the lending institution; which can be a bank, trust company, credit union, mortgage corporation, finance company or even an individual investor. Which lender offers the loan programs that is right for you? A mortgage broker will help you find the best fit. Your broker will present your mortgage application to one or more lenders, and works with the lender of choice until the loan closes. At closing, the broker's commission is given by the borrower.

About Mortgage Bankers

The biggest difference between a mortgage broker and a mortgage banker is that a loan officer works on behalf of a lending institution (a bank, credit union, or others) to process loans only originated from that institution. While a loan officer may market quite a range of loans, they will be programs with that lender alone.

A mortgage banker will represent you to the bank or other lending institution. The mortgage banker can help you through the selection, processing and closing of the loan. Either a salary or commission is paid to loan officers by their employers.