Mortgage Broker or Mortgage Banker

When it comes to finding a mortgage loan, you should know the difference between a loan officer and a mortgage broker. As a new home is the result of the work of both mortgage broker and mortgage banker, people often confuse the two job types. Yet understanding how they differ will be helpful to the mortgage process.

About Mortgage Brokers

A mortgage broker is a person or group that works as an independent agent for the mortgage loan borrower as well as the lender. A mortgage broker facilitates things for you and your lender, which can be one of the following: a bank, trust company, credit union, mortgage corporation, finance company or even an individual investor. Acting as a facilitator between you and your lender, your mortgage broker can match you with a credit union, bank, trust company, finance company, mortgage corporation or even an individual investor. A mortgage broker can consider your finances to determine which lender is the right fit for you. From application to closing, your mortgage broker facilitates your loan process: offering your loan application to several lenders, and walking you with the chosen lender through to the closing of your loan. At closing, the broker's commission is given by the borrower.

What is a Mortgage Banker?

The most important difference between a mortgage broker and a loan officer is that a loan officer is employed by a lending institution (a bank, credit union, or others) to market and process loans only from that institution. They may be able to promote loans to fit many different situations, but all the loans will be programs from the same lender.

A mortgage banker (also called an "account executive" or "loan representative") acts on behalf of the borrower to the lending institution. The loan officer can guide the borrower through the application, processing and closing of the loan. Lenders give their mortgage bankers a salary or commission.