Mortgage Broker and Mortgage Banker

When you apply for a mortgage loan, you may work with a mortgage banker or you may choose to work with a mortgage broker. Because both reap the same result (a new home), it's understandable to confuse the two. But as you enter the application process, it can help if you recognize how they are different.

About Mortgage Brokers

A mortgage broker is an individual or group that is an independent agent for both the mortgage loan applicant and the lender. 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 a 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. You partner with a mortgage broker to look at your financial circumstance and find the lender who has the right loan program for you. Your broker will offer your loan application to one or more lenders, and works with the chosen lender until the loan closes. If the loan closes, the broker's commission comes from the borrower.

About Loan Officers

Mortgage Bankers work for a particular lending institution (such as a bank, credit union, etc.) who process mortgages and other loan products for their employer alone. There can be an assortment of loans types to draw from, but all are programs of that specific lending institution.

A loan officer will represent you to the bank or other lending institution. The mortgage banker will guide you through the application, processing and closing of the loan. Either a salary or commission is given to mortgage brokers by their employers.