Know what to expect: Mortgage Brokers vs. Mortgage Bankers

When you apply for a mortgage loan, you need to know the difference between a mortgage broker and a loan officer. Because both a mortgage broker and lending officer can help you purchase your new home, it's easy to confuse the two. But for your application process, it can help if you recognize they ways they differ.

Mortgage Brokers

During the mortgage loan process, an individual or company who is an independent agent for both mortgage loan applicant and lender is a mortgage broker. A mortgage broker coordinates things between 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 bank, trust company, credit union, mortgage corporation, finance company or even a private investor. A mortgage broker can look at your financial situation to determine which lender is the right fit for you. From application to closing, your mortgage broker works with you: offering your mortgage application to several lenders, and coordinating the process with the lender through to the closing of the loan. The borrower submits a commission to the broker when the loan closes.

Mortgage Bankers

Mortgage Bankers represent a particular lending institution (such as a bank) who process mortgages and other loans originated by their place of employment alone. There may be a variety of loans types to draw from even though all are programs of that particular lender.

A loan officer will represent you to the bank or other lending institution. From choosing a loan product to closing, a loan officer will guide you through the process. Loan officers will be paid a commission or salary for their services by their employers.