Know the difference: Mortgage Brokers and Mortgage Bankers

Either a mortgage broker or a loan officer can help you when you need a mortgage loan. People can confuse them as both will reap the same result: a new home. Yet it will be important to understand the difference between the two jobs so you have clear expectations of them during your mortgage application process.

Mortgage Brokers

During the mortgage loan process, an individual or company who is an independent agent for both mortgage loan borrower and lender is a mortgage broker. A mortgage broker facilitates 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 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 a private investor. You use a mortgage broker to consider your financial circumstance and lead you to the lender who has the best loan program for you. You deliver your mortgage application to your broker, who offers it to a number of lenders. Your mortgage broker then helps you work with the lender of choice until the loan closes. When the loan closes, the broker's commission is paid by the borrower.

What is a Mortgage Banker?

Lending Institutions (banks, finance companies, and others) employ loan officers to promote, and process loans originated by that specific institution alone. While a loan officer may market quite a variety of loans, they are all products from that lender alone.

Your loan officer will represent you to the bank or other lending institution. A loan officer can walk you through the application, processing and closing of the loan. Mortgage bankers will be compensated with a commission or salary for their work by their employers.