Mortgage Broker and Mortgage Banker

When it's time to apply for a mortgage , you may work with a loan officer or you may choose to work with a mortgage broker. Since both reap the same outcome (a new home), people can confuse the two. But for the application process, it can benefit you if you recognize how they are different.

What is a Mortgage Broker?

A mortgage broker is an individual or firm that acts as an independent agent for both the mortgage loan applicant and the lender. A mortgage broker coordinates things between you and your lender, which can be one of the following: a bank, trust company, credit union, mortgage corporation, finance company 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, private investor. Which lender has the loan programs that is right for you? A mortgage broker will guide you to the right fit. Your broker will present your loan application to a handful of lenders, and works with the lender of choice until closing. The broker receives a commission from the borrower if the loan closes.

Loan Officers

Lending Institutions (banks, finance companies, and others) employ mortgage bankers to market, and process mortgage loans on behalf of that specific institution alone. There may be a wide range of loans types to choose from, but all are programs of that particular lender.

Also known as a "loan representative" or "account executive," a mortgage banker acts of behalf of the borrower to the lending institution. A mortgage banker can walk you through the selection, processing and closing of the loan. Lenders compensate the loan officers with a commission or salary.