Know what to expect: Mortgage Brokers and Mortgage Bankers

When you need a mortgage loan, you may work with a mortgage banker or you may choose to work with a mortgage broker. Since both produce the same outcome (a new home), it's understandable to confuse the two job types. However, it will be valuable to recognize the ways they differ so you know what to expect from them during the mortgage application process.

What is a Mortgage Broker?

A mortgage broker (either a group or an individual) is an independent agent for the mortgage loan applicant as well as the lender. Your mortgage broker will stand as facilitator between you and the lending institution; which may be a bank, trust company, credit union, mortgage corporation, finance company or even a private investor. Which lender has the loans that fits your needs? A mortgage broker will help you find the right one. You give your loan application to your broker, who submits it to one or more lenders. Your mortgage broker then helps you work with the lender chosen until the loan closes. The borrower submits a commission to the broker at closing.

What is a Mortgage Banker?

The main difference between a mortgage broker and a loan officer is that the latter works on behalf of a lending institution (a bank, credit union, or others) to process loans only from the products of that institution. There can be a wide range of loans types to draw from, but all are products of that particular lending institution.

Your mortgage banker will represent you to the bank or other lending institution. The borrower is helped through the entire process, from finding the loan to closing, by the mortgage banker. Mortgage bankers are paid a commission or salary for their services by their employers.