Mortgage Broker or Mortgage Banker

When it comes to getting a mortgage loan, you should know the difference between a mortgage broker and a mortgage banker. Since a new home is the outcome of the work of both mortgage broker and mortgage banker, people usually confuse them. Yet it is beneficial to understand how they differ so you have clear expectations of them during the mortgage process.

Mortgage Brokers

A mortgage broker (either a group or an individual) is an independent agent for both the mortgage loan applicant and the lender. A mortgage broker facilitates 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 a private investor. Which lender has the loan programs that is best for you? A mortgage broker will help you find the best fit. Your broker will submit your mortgage application to one or more lenders, and works with the lender of choice until the loan closes. The borrower pays a commission to the broker when the loan closes.

What is a Loan Officer?

Loan officers work for a particular lending institution (such as a bank) who process mortgages and other lending programs for their employer alone. There may be a wide range of loans types to choose from even though all are programs of that specific lending institution.

A loan officer (also known as an "account executive" or "loan representative") acts on behalf of the borrower to the lender. From finding a loan product to closing, a mortgage banker will guide a borrower through the process. Either a salary or commission is given to loan officers by their employers.