Mortgage Broker vs. Mortgage Banker

When it comes to applying for a mortgage loan, you may work with a mortgage banker or you may choose to work with a mortgage broker. Because both a mortgage broker and lending officer will help you fund a new home, people usually confuse them. Yet recognizing how they differ will be useful to your mortgage loan process.

What is a Mortgage Broker?

During the mortgage loan process, an individual or group who is an independent agent for the mortgage loan borrower as well as the lender is a mortgage broker. Your mortgage broker will stand as facilitator between you and the lending institution; which may be a bank, trust company, credit union, mortgage corporation, finance company or even an individual, private investor. A mortgage broker will look at your numbers to find out which lender is the best fit for you. You give your application to your broker, who submits it to several lenders. Your mortgage broker then guides your work with the lender chosen until 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 promote, and process mortgage loans from that specific institution alone. While a mortgage banker may market quite a range of loan programs, they all are programs from that specific lender.

A mortgage banker (also known as an "account executive" or "loan representative") represents the borrower to the lending institution. A mortgage banker will guide the borrower through the selection, processing and loan closing. Loan officers may be given a commission or salary for their services by their employers.