Mortgage Broker vs. Mortgage Banker

When it's time to locate a mortgage loan, you need to know the difference between a mortgage broker and a mortgage banker. Because a new home is the outcome of the work of both mortgage broker and mortgage banker, it's common to confuse the two job types. Yet knowing how they are different will be valuable to the mortgage loan process.

About Mortgage Brokers

A mortgage broker (either a firm or an individual) is an independent agent for both the mortgage loan borrower and the lender. A mortgage broker coordinates things for 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 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 investor. Which lender has the loan programs that fits your financial situation? A mortgage broker will lead you to the best fit. From application to closing, your mortgage broker works with you: offering your mortgage application to a number of lenders, and walking you with the chosen lender through to the closing of the loan. Upon closing, the broker's commission is paid by the borrower.

About Mortgage Bankers

Mortgage Bankers work for a particular lending institution (such as a bank) who market and process mortgages and other loans from their employer alone. They may be able to offer loans to fit a variety of situations, but all the loans will be programs from the same lender.

Your loan officer will represent you to the bank or other lending institution. The loan officer can guide the borrower through the selection, processing and loan closing. Lending institutions compensate their mortgage bankers with a commission or salary.