Mortgage Broker or Mortgage Banker

When it's time to locate a mortgage , you need to know the difference between a mortgage banker and a mortgage broker. Because both reap the same result (a new home), it's understandable to confuse the two. However, it will be useful to understand how they differ so you know what to expect from them as you enter the mortgage process.

About Mortgage Brokers

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. Your mortgage broker will stand as facilitator between you and the lending institution; which may be a credit union, bank, trust company, finance company, mortgage corporation or even a private investor. Which lender has the loans that is right for you? A mortgage broker will lead you to the right fit. Your broker will offer your loan application to several lenders, and works with the chosen lender until the loan closes. The borrower pays a commission to the broker at closing.

Mortgage Bankers

Mortgage Bankers are representatives of a specific lending institution (such as a bank, credit union, etc.) who work with mortgages and other loan products for their place of employment alone. They may be able to offer loans to fit many different situations, but all the loans will be programs from the same lender.

A loan officer (also called an "account executive" or "loan representative") acts on behalf of the borrower to the lending institution. From finding a loan product to closing, a mortgage banker will help you through the process. Either a salary or commission is paid to mortgage brokers by their employers.