Mortgage Broker vs. Mortgage Banker

When you apply for a mortgage , you should know the difference between a mortgage broker and a loan officer. Because a new home is the outcome of the work of both mortgage broker and mortgage banker, it's easy to confuse the two job types. But for your application process, it can help if you recognize they ways they differ.

Mortgage Brokers

A mortgage broker is someone or group that serves as an independent agent for both the mortgage loan borrower and the lender. Your mortgage broker will stand as coordinator between you and the lending institution; which may be a credit union, bank, trust company, finance company, mortgage corporation or even an individual, private investor. A mortgage broker will examine your numbers to find out which lender is the best fit for you. From application to closing, your mortgage broker facilitates the loan process: presenting your application to several lenders, and walking you with the chosen lender through to closing. At closing, the broker's commission comes from the borrower.

About Loan Officers

The main difference between a mortgage broker and a loan officer is that a mortgage banker works on behalf of a lending institution (a bank, credit union, or others) to market and process loans only from the products of that institution. There can be a wide range of loans types to choose from although all are products of that particular lender.

Also called a "loan representative" or "account executive," a loan officer acts of behalf of the borrower to the lender. A loan officer can help you through the application, processing and loan closing. Either a salary or commission is given to loan officers by their employers.