Know what to expect: Mortgage Brokers vs. Mortgage Bankers

Either a mortgage broker or a mortgage banker can help you when it comes to locating a mortgage loan. People often confuse them as both will yield the same outcome: a new home. But as you begin your application process, it can help if you recognize they ways they differ.

Mortgage Brokers

During the mortgage loan process, an individual or firm who is an independent agent for the mortgage loan borrower 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 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. A mortgage broker can examine your finances to determine which lender is the right fit for you. You give your mortgage application to your broker, who offers it to a number of lenders. Your mortgage broker then guides your work with the lender chosen until the loan closes. The borrower gives a commission to the broker at closing.

What is a Loan Officer?

Lending Institutions (banks, finance companies, and others) employ loan officers to market, and process mortgage loans solely from that specific institution. They may be able to offer loans to fit a variety of situations, but all the loans will be products of the same lender.

Your mortgage banker will represent you to the bank or other lending institution. A loan officer will guide you through the selection, processing and loan closing. Mortgage bankers are compensated with a commission or salary for their services by their employers.