Mortgage Broker and Mortgage Banker

When you need a mortgage loan, you need to know the difference between a mortgage broker and a mortgage banker. Because a new home is the result of the work of both mortgage broker and mortgage banker, it's common to confuse the two job types. However, understanding the ways they differ will be helpful to the mortgage process.

What is a Mortgage Broker?

During the mortgage loan process, an individual or group who is an independent agent for the mortgage loan applicant as well as the lender is a mortgage broker. Your mortgage broker will stand as coordinator between you and the lending institution; which can be a credit union, bank, trust company, finance company, mortgage corporation or even an individual, private investor. A mortgage broker can review your numbers to determine which lender is the best fit for you. You deliver your application to your broker, who offers it to one or more lenders. Your mortgage broker then assists your work with the lender chosen until the loan closes. The borrower gives a commission to the broker when the loan closes.

Loan Officers

Lending Institutions (banks, finance companies, and others) employ loan officers to market, and process loans originated by that specific institution alone. Although a mortgage banker may promote quite a range of loan programs, they all are programs with that particular lender.

Also known as a "loan representative" or "account executive," a mortgage banker acts of behalf of the borrower to the lender. From finding a loan program to closing, a mortgage banker will help you through the process. Loan officers may be compensated with a commission or salary for their work by their employers.