Know the difference: Mortgage Brokers vs. Mortgage Bankers

When you're looking to get a mortgage , you may work with a mortgage banker or you may choose to work with a mortgage broker. Since both give the same result (a new home), it's easy to confuse the two job types. But as you begin the application process, it can benefit you if you understand they ways they differ.

Mortgage Brokers

A mortgage broker (either a company or an individual) is an independent agent for both the mortgage loan borrower and 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, 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 a private investor. You work with a mortgage broker to consider your financial circumstance and find the lender who has the best loan for you. Your broker will offer your mortgage application to one or more lenders, and works with the lender of choice until closing. At closing, the broker's commission is paid by the borrower.

About Mortgage Bankers

The biggest difference between a mortgage broker and a loan officer is that the latter is employed by a lending institution (a bank, credit union, or others) to process loans only from the programs of that institution. Although a loan officer may market quite a variety of loans, they are all programs from that particular lender.

Your mortgage banker will represent you to the bank or other lending institution. The borrower is helped through the entire process, from loan selection to closing, by the mortgage banker. Lending institutions give their loan officers a salary or commission.