Know the difference: Mortgage Brokers and Mortgage Bankers

When it comes to getting a mortgage , you may work with a mortgage banker or you may choose to work with a mortgage broker. Because both give the same result (a new home), people often confuse them. But as you enter your application process, it can benefit you if you understand they ways they differ.

Mortgage Brokers

During the mortgage loan process, an individual or firm who is an independent agent for the mortgage loan applicant as well as the lender is a mortgage broker. Your mortgage broker will stand as facilitator between you and the lending institution; which may be a bank, trust company, credit union, mortgage corporation, finance company or even an individual investor. A mortgage broker can examine your numbers to determine which lender is the best fit for your loan needs. You deliver your application to your broker, who offers it to one or more lenders. Your mortgage broker then guides your work with the lender of choice until closing. The broker receives a commission from the borrower when the loan closes.

What is a Mortgage Banker?

Lending Institutions (banks, finance companies, and others) employ mortgage bankers to offer, and process loans solely on behalf of that specific institution. They may have the ability to offer loans to fit a variety of situations, but all the loans are products from the same lender.

A loan officer (also known as an "account executive" or "loan representative") represents the borrower to the lender. From selecting a loan to closing, a mortgage banker can walk the borrower through the process. Either a salary or commission is given to loan officers by their employers.