Mortgage Broker vs. Mortgage Banker

When it's time to get a mortgage , you need to know the difference between a mortgage broker and a loan officer. Since both reap the same outcome (a new home), people usually confuse them. Yet it is beneficial to recognize the ways they differ so you know what to expect from them as you enter the mortgage application process.

Mortgage Brokers

A mortgage broker (either a company or an individual) is an independent agent for both the mortgage loan applicant and the lender. A mortgage broker facilitates things between you and your lender, which can be one of the following: a bank, trust company, credit union, mortgage corporation, finance company or even a private 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, private investor. You work with a mortgage broker to consider your financial circumstance 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 walking you with the chosen lender through to the closing of the loan. Upon closing, the broker's commission is given by the borrower.

What is a Mortgage Banker?

Loan officers represent a specific lending institution (such as a bank, credit union, etc.) who work with mortgages and other loans on behalf of their employer alone. There can be a variety of loans types to choose from, but all are products of that specific lender.

Also called a "loan representative" or "account executive," a mortgage banker acts of behalf of the borrower to the lender. The borrower is walked through the entire process, from finding a loan to closing, by the mortgage banker. Mortgage bankers may be given a commission or salary for their services by their employers.