Know the difference: Mortgage Brokers vs. Mortgage Bankers

Either a mortgage broker or a mortgage banker can assist you when you're looking to get a mortgage . As both produce the same result (a new home), it's understandable to confuse the two job types. However, recognizing how they are different will be advantageous to the mortgage process.

Mortgage Brokers

During the mortgage loan process, an individual or firm who is an independent agent for both mortgage loan applicant and lender is a mortgage broker. Your mortgage broker will stand as facilitator between you and the lending institution; which may be a bank, trust company, credit union, mortgage corporation, finance company or even an individual, private investor. A mortgage broker can look at your financial situation to determine which lender is the best fit for you. From application to closing, your mortgage broker works with you: presenting your application to several lenders, and walking you with the chosen lender through to the closing of the loan. The borrower submits a commission to the broker upon closing.

About Loan Officers

The most important difference between a mortgage broker and a mortgage banker is that a mortgage banker works on behalf of a lending institution (a bank, credit union, or others) to offer and process loans only from the programs of that institution. They may have the ability to offer loans to fit a variety of situations, but all the loans will be products of the same lender.

Also called a "loan representative" or "account executive," a loan officer acts of behalf of the borrower to the lending institution. A mortgage banker will guide the borrower through the application, processing and loan closing. Loan officers are paid a commission or salary for their work by their employers.