Mortgage Broker vs. Mortgage Banker

Either a mortgage broker or a mortgage banker can work with you when it's time to get a mortgage loan. Since both a mortgage broker and mortgage banker can help you buy a new home, people usually confuse the two. Yet it is useful to understand how they differ so you know what to expect from them during your mortgage application process.

What is a Mortgage Broker?

During the mortgage loan process, an individual or firm who is an independent agent for the mortgage loan applicant as well as the lender is a mortgage broker. A mortgage broker coordinates 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, private 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. Which lender has the mortgage loans that fits your financial situation? A mortgage broker will guide you to the best one. 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 closing. The borrower gives a commission to the broker when the loan closes.

About Mortgage Bankers

Lending Institutions (banks, finance companies, and others) employ loan officers to offer, and process mortgage loans solely on behalf of that particular institution. There may be a wide variety of loans types to draw from although all are products of that specific lender.

Also called a "loan representative" or "account executive," a loan officer represents the borrower to the lender. The borrower is helped through the whole process, from choosing a loan to closing, by the mortgage banker. Either a salary or commission is given to loan officers by their employers.