Mortgage Broker or Mortgage Banker

When you need a mortgage loan, you may work with a loan officer or you may choose to work with a mortgage broker. Since a new home is the outcome of the work of both mortgage broker and mortgage banker, people often confuse them. But for the application process, it can benefit you if you know how they are different.

About Mortgage Brokers

A mortgage broker (either a group or an individual) is an independent agent for the mortgage loan applicant as well as the lender. A mortgage broker coordinates 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 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, private investor. A mortgage broker can analyze your finances to determine which lender is the right fit for your loan needs. From application to closing, your mortgage broker works with you: submitting your mortgage application to a number of lenders, and coordinating the process with the lender through to closing. The borrower submits a commission to the broker if the loan closes.

About Loan Officers

Mortgage Bankers represent a particular lending institution (such as a bank, credit union, etc.) who work with mortgages and other loan products for their employer alone. They may have the ability to promote loans to fit many different situations, but all the loans are products from the same lender.

Also called a "loan representative" or "account executive," a mortgage banker acts of behalf of the borrower to the lending institution. From choosing a loan program to closing, a loan officer will guide you through the process. Mortgage bankers can be compensated with a commission or salary for their services by their employers.