Mortgage Broker or Mortgage Banker

Either a mortgage broker or a mortgage banker may assist you when you work on your application for a mortgage . As a new home is the result of the work of both mortgage broker and mortgage banker, it's easy to confuse them. However, it is helpful to understand the ways they differ so you have clear expectations of them as you enter your mortgage application process.

Mortgage Brokers

A mortgage broker (either a firm or an individual) is an independent agent for both the mortgage loan applicant and the lender. Your mortgage broker will stand as facilitator between you and the lending institution; which can be a bank, trust company, credit union, mortgage corporation, finance company or even an individual, private investor. You partner with a mortgage broker to look at your financial situation and lead you to the lender who has the right mortgage loan for you. From application to closing, your mortgage broker works with you: offering your application to several lenders, and coordinating the process with the lender through to closing. At closing, the broker's commission is paid by the borrower.

About Loan Officers

Mortgage Bankers work for a specific lending institution (such as a bank) who work with mortgages and other lending programs from their employer alone. There can be an assortment of loans types to draw from, but all are programs of that particular lender.

Your loan officer represents you to the bank or other lending institution. From selecting a loan program to closing, a mortgage banker will help a borrower through the process. Mortgage bankers will be compensated with a commission or salary for their work by their employers.