Know what to expect: Mortgage Brokers vs. Mortgage Bankers

When it comes to finding a mortgage loan, you need to know the difference between a mortgage broker and a loan officer. As a new home is the outcome of the work of both mortgage broker and mortgage banker, people frequently confuse the two. However, it will be valuable to recognize the difference between them so you know what to expect from them during the mortgage process.

About Mortgage Brokers

During the mortgage loan process, an individual or group who is an independent agent for the mortgage loan borrower as well as the lender is a mortgage broker. Your mortgage broker will stand as coordinator between you and the lending institution; which can be a bank, trust company, credit union, mortgage corporation, finance company or even an individual investor. You work with a mortgage broker to examine your financial circumstance and lead you to the lender who has the right loan program for you. You deliver your loan application to your broker, who submits it to one or more lenders. Your mortgage broker then helps you work with the lender chosen until closing. The borrower pays a commission to the broker upon closing.

What is a Mortgage Banker?

Lending Institutions (banks, finance companies, and others) employ mortgage bankers to promote, and process mortgage loans solely originated by that particular institution. While a mortgage banker may offer quite a variety of loans, they all are products of that specific lender.

A mortgage banker (also known as an "account executive" or "loan representative") acts on behalf of the borrower to the lending institution. From choosing a loan program to closing, a loan officer can walk you through the process. Lenders give their mortgage bankers a salary or commission.