Know the difference: Mortgage Brokers and Mortgage Bankers

Either a mortgage broker or a loan officer can assist you when it's time to apply for a mortgage . Because a new home is the outcome of the work of both mortgage broker and mortgage banker, it's understandable to confuse them. But for your application process, it will benefit you if you understand how they are different.

Mortgage Brokers

A mortgage broker is an individual or company that works as an independent agent for the mortgage loan borrower as well as the lender. Your mortgage broker will stand as facilitator between you and the lending institution; which can be a credit union, bank, trust company, finance company, mortgage corporation or even an individual, private investor. Which lender has the mortgage loans that fits your financial situation? A mortgage broker will lead you to the best fit. Your broker will present your mortgage application to various lenders, and works with the chosen lender until the loan closes. At closing, the broker's commission is given by the borrower.

What is a Mortgage Banker?

Loan officers are representatives of a particular lending institution (such as a bank) who process mortgages and other lending programs for their company alone. While a mortgage banker may promote quite a variety of loan programs, they are all programs with that lender alone.

A mortgage banker (also known as an "account executive" or "loan representative") acts on behalf of the borrower to the lender. The mortgage banker will walk you through the application, processing and closing of the loan. Either a salary or commission is paid to loan officers by their employers.