Know the difference: Mortgage Brokers vs. Mortgage Bankers

When it comes to getting a mortgage loan, you may work with a mortgage banker or you may choose to work with a mortgage broker. It's understandable to confuse the two job types since both will yield the same outcome: a new home. However, understanding how they differ is advantageous to the mortgage loan process.

What is a Mortgage Broker?

During the mortgage loan process, an individual or company who is an independent agent for the mortgage loan borrower as well as the 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, 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, private investor. A mortgage broker can analyze your financial situation to find out which lender is the right fit for you. Your broker will offer your mortgage loan application to a handful of lenders, and works with the lender of choice until closing. The borrower submits a commission to the broker upon closing.

About Loan Officers

Loan officers are representatives of a specific lending institution (such as a bank, credit union, etc.) who promote and process mortgages and other loans for their employer alone. They may be able to offer loans to fit a variety of situations, but all the loans are products from the same lender.

A loan officer (also called an "account executive" or "loan representative") represents the borrower to the lender. From choosing a loan to closing, a loan officer will guide you through the process. Lenders compensate their loan officers with a commission or salary.