Know the difference: Mortgage Brokers and Mortgage Bankers

When it's time to find a mortgage , you may work with a mortgage banker or you may choose to work with a mortgage broker. Because both a mortgage broker and mortgage banker can help you buy your new home, people frequently confuse the two. But as you begin your application process, it will benefit you if you know how they are different.

About Mortgage Brokers

A mortgage broker (either a group or an individual) is an independent agent for the mortgage loan applicant as well as the lender. 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 investor. A mortgage broker can look at your finances to find out which lender is the right fit for you. From application to closing, your mortgage broker works with you: offering your loan application to a number of lenders, and walking you with the chosen lender through to the closing of the loan. When the loan closes, the broker's commission comes from the borrower.

About Loan Officers

Loan officers work for a particular lending institution (such as a bank) who offer and process mortgages and other loans for their employer alone. There can be a wide variety of loans types to draw from even though all are products of that specific lender.

A mortgage banker (also called an "account executive" or "loan representative") represents the borrower to the lender. The borrower is guided through the whole process, from selecting the loan to closing, by the mortgage banker. Either a salary or commission is given to loan officers by their employers.