Know what to expect: Mortgage Brokers vs. Mortgage Bankers

When you apply for a mortgage , you may work with a mortgage banker or you may choose to work with a mortgage broker. It's understandable to confuse the two job types since both will give the same result: a new home. But as you enter the application process, it will benefit you if you know how they differ.

About Mortgage Brokers

A mortgage broker is a person or firm that serves as an independent agent for both the mortgage loan applicant and the lender. Your mortgage broker will stand as coordinator between you and the lending institution; which may be a credit union, bank, trust company, finance company, mortgage corporation or even a private investor. Which lender offers the mortgage loans that is best for you? A mortgage broker will help you find the right one. From application to closing, your mortgage broker facilitates the loan process: offering your mortgage application to a number of lenders, and coordinating the process with the lender through to closing. The borrower submits a commission to the broker if the loan closes.

About Loan Officers

Mortgage Bankers work for a specific lending institution (such as a bank, credit union, etc.) who process mortgages and other loan products from their place of employment alone. Although a loan officer may offer quite a range of loans, they are all products with that lender alone.

Also called a "loan representative" or "account executive," a mortgage banker acts of behalf of the borrower to the lending institution. From finding a loan product to closing, a loan officer will walk you through the process. Lenders compensate the mortgage bankers with a commission or salary.