Mortgage Broker and Mortgage Banker

When you apply for a mortgage , you should know the difference between a mortgage broker and a mortgage banker. Since both produce the same outcome (a new home), people sometimes confuse them. But for the application process, it will benefit you if you know they ways they differ.

What is a Mortgage Broker?

During the mortgage loan process, an individual or group who is an independent agent for both mortgage loan borrower and lender is a mortgage broker. 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. A mortgage broker can analyze your finances to determine which lender is the right fit for you. You give your mortgage loan application to your broker, who offers it to various lenders. Your mortgage broker then helps you work with the lender chosen until the loan closes. The broker gets a commission from the borrower when the loan closes.

Mortgage Bankers

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

A loan officer (also known as an "account executive" or "loan representative") acts on behalf of the borrower to the lending institution. From finding a loan program to closing, a mortgage banker can walk a borrower through the process. Either a salary or commission is paid to loan officers by their employers.