Mortgage Broker and Mortgage Banker

When you work on your application for a mortgage , you should know the difference between a loan officer and a mortgage broker. It's common to confuse the two since both will give the same outcome: a new home. Yet it is important to understand how they differ so you know what to expect from them as you enter your mortgage process.

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 coordinator between you and the lending institution; which may be a credit union, bank, trust company, finance company, mortgage corporation or even a private investor. You partner with a mortgage broker to consider your financial circumstance and lead you to the lender who has the right loan for you. Your broker will offer your mortgage application to one or more lenders, and works with the chosen lender until the loan closes. The broker gets a commission from the borrower when the loan closes.

What is a Mortgage Banker?

Lending Institutions (banks, finance companies, and others) employ loan officers to promote, and process mortgage loans from that specific institution alone. They may have the ability to offer loans to fit many different situations, but all the loans will be programs of the same lender.

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