Know the difference: Mortgage Brokers and Mortgage Bankers

When it's time to get a mortgage loan, you need to know the difference between a loan officer and a mortgage broker. Since a new home is the result of the work of both mortgage broker and mortgage banker, it's common to confuse the two. However, it will be beneficial to recognize how they differ so you know what to expect from them during your mortgage application process.

What is a Mortgage Broker?

A mortgage broker (either a group or an individual) is an independent agent for both the mortgage loan borrower and the lender. Your mortgage broker will stand as facilitator between you and the lending institution; which can be a bank, trust company, credit union, mortgage corporation, finance company or even a private investor. Which lender offers the loans that is right for you? A mortgage broker will help you find the best fit. From application to closing, your mortgage broker facilitates your loan process: offering your loan application to several lenders, and walking you with the chosen lender through to closing. If the loan closes, the broker's commission comes from the borrower.

About Mortgage Bankers

Mortgage Bankers represent a particular lending institution (such as a bank, credit union, etc.) who market and process mortgages and other loan programs on behalf of their employer alone. While a loan officer may market quite a variety of loan programs, they will be products with that lender alone.

Also known as a "loan representative" or "account executive," a mortgage banker acts of behalf of the borrower to the lending institution. The loan officer will walk the borrower through the selection, processing and closing of the loan. Loan officers are given a commission or salary for their work by their employers.