Know what to expect: Mortgage Brokers vs. Mortgage Bankers

When you work on your application for a mortgage , you need to know the difference between a mortgage broker and a mortgage banker. As both produce the same outcome (a new home), it's understandable to confuse the two job types. However, it will be useful to understand the difference between them so you know what to expect from them during your mortgage application process.

About Mortgage Brokers

During the mortgage loan process, an individual or company who is an independent agent for the mortgage loan applicant as well as the lender is a mortgage broker. A mortgage broker facilitates 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, private investor. Acting as a facilitator between you and your lender, your mortgage broker can match you with a credit union, bank, trust company, finance company, mortgage corporation or even an individual, private investor. A mortgage broker will analyze your numbers to determine which lender is the right fit for you. From application to closing, your mortgage broker facilitates the loan process: submitting your application to several lenders, and walking you with the chosen lender through to the closing of the loan. The borrower pays a commission to the broker upon closing.

Mortgage Bankers

The most important difference between a mortgage broker and a loan officer is that a loan officer is employed by a lending institution (a bank, credit union, or others) to market and process loans solely originated from that institution. There can be a wide range of loans types to draw from, but all are products of that specific lending institution.

A loan officer represents you to the bank or other lending institution. From choosing a loan program to closing, a mortgage banker can guide the borrower through the process. Lending institutions compensate their loan officers with a salary or commission.