Mortgage Broker or Mortgage Banker

Either a mortgage broker or a loan officer can assist you when you work on your application for a mortgage . Since both yield the same outcome (a new home), people often confuse the two job types. Yet it is useful to understand the difference between them so you know what to expect from them during your mortgage application process.

About Mortgage Brokers

A mortgage broker (either a group or an individual) is an independent agent for both the mortgage loan borrower and the lender. Your mortgage broker will stand as facilitator between you and the lending institution; which can be a credit union, bank, trust company, finance company, mortgage corporation or even an individual investor. You work with a mortgage broker to review your financial situation and find the lender who has the best loan for you. You give your mortgage application to your broker, who presents it to one or more lenders. Your mortgage broker then helps you work with the lender chosen until closing. The broker receives a commission from the borrower upon closing.

Loan Officers

Lending Institutions (banks, finance companies, and others) employ mortgage bankers to market, and process loans solely originated by that specific institution. They may have the ability to offer loans to fit a variety of situations, but all the loans are products from 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. The loan officer can guide the borrower through the application, processing and closing of the loan. Lenders pay their mortgage bankers a commission or salary.