Mortgage Broker and Mortgage Banker

When you work on your application for a mortgage loan, you need to know the difference between a mortgage broker and a loan officer. As a new home is the outcome of the work of both mortgage broker and loan officer, people sometimes confuse the two job types. But as you begin the application process, it will help if you know their differences.

About Mortgage Brokers

A mortgage broker (either a firm or an individual) is an independent agent for the mortgage loan borrower as well as the lender. A mortgage broker facilitates things between you and your lender, which can be one of the following: a credit union, bank, trust company, finance company, mortgage corporation or even an individual investor. Acting as a facilitator between you and your lender, your mortgage broker can match you with a credit union, bank, trust company, finance company, mortgage corporation or even an individual, private investor. Which lender offers the loans that is best for you? A mortgage broker will guide you to the best fit. Your broker will offer your loan application to one or more lenders, and works with the lender of choice until the loan closes. The broker is given a commission from the borrower if the loan closes.

Mortgage Bankers

The most important difference between a mortgage broker and a loan officer is that the latter works for a lending institution (a bank, credit union, or others) to process loans solely from the products of that institution. They may be able to market loans to fit many different situations, but all the loans are programs of the same lender.

A mortgage banker (also known as an "account executive" or "loan representative") represents the borrower to the lending institution. A mortgage banker can guide the borrower through the application, processing and closing of the loan. Lenders pay their mortgage bankers a salary or commission.