Mortgage Broker vs. Mortgage Banker

When you need a mortgage , you need to know the difference between a loan officer and a mortgage broker. Since a new home is the result of the work of both mortgage broker and loan officer, people usually confuse the two. However, knowing the differences between them will be useful to your mortgage loan process.

About Mortgage Brokers

A mortgage broker (either a firm or an individual) is an independent agent for the mortgage loan borrower as well as the lender. A mortgage broker coordinates 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 investor. Acting as a facilitator between you and your lender, your mortgage broker can match you with a bank, trust company, credit union, mortgage corporation, finance company or even an individual investor. You partner with a mortgage broker to look at your financial circumstance and lead you to the lender who has the best loan for you. You deliver your mortgage application to your broker, who offers it to various lenders. Your mortgage broker then assists your work with the lender chosen until closing. The borrower submits a commission to the broker if the loan closes.

Mortgage Bankers

Lending Institutions (banks, finance companies, and others) employ mortgage bankers to market, and process loans solely from that specific institution. There may be a wide variety of loans types to choose from although all are programs of that specific lender.

A loan officer (also known as an "account executive" or "loan representative") acts on behalf of the borrower to the lending institution. The borrower is helped through the whole process, from finding a loan to closing, by the mortgage banker. Lenders compensate their mortgage bankers with a salary or commission.