Mortgage Broker vs. Mortgage Banker

When you work on your application for a mortgage , you should know the difference between a mortgage broker and a loan officer. People often confuse them as both will produce the same outcome: a new home. However, recognizing the differences between them is advantageous to the mortgage loan process.

About Mortgage Brokers

A mortgage broker is someone or company that is an independent agent for the mortgage loan applicant as well as the lender. 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. Which lender offers the loan programs that fits your needs? A mortgage broker will help you find the best one. You deliver your mortgage loan application to your broker, who presents it to one or more lenders. Your mortgage broker then guides your work with the lender chosen until the closing of the loan. The borrower submits a commission to the broker at closing.

About Loan Officers

The main difference between a mortgage broker and a loan officer is that a mortgage banker works on behalf of a lending institution (a bank, credit union, or others) to process loans solely from that institution. Although a mortgage banker may promote quite a variety of loan programs, they will be products with that lender alone.

Also known as a "loan representative" or "account executive," a mortgage banker acts of behalf of the borrower to the lender. The borrower is walked through the entire process, from loan selection to closing, by the loan officer. Lending institutions pay their mortgage bankers a commission or salary.