Mortgage Broker vs. Mortgage Banker

Either a mortgage broker or a mortgage banker can help you when you apply for a mortgage . As both produce the same outcome (a new home), it's understandable to confuse the two job types. Yet it will be helpful to recognize the difference between them so you have clear expectations of them as you enter your mortgage application process.

What is a Mortgage Broker?

A mortgage broker is an individual or firm that acts as 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 can be a credit union, bank, trust company, finance company, mortgage corporation or even an individual investor. You partner with a mortgage broker to examine your financial situation and lead you to the lender who has the right loan for you. From application to closing, your mortgage broker works with you: submitting your loan application to a number of lenders, and coordinating the process with the lender through to the closing of the loan. The borrower gives a commission to the broker if the loan closes.

Loan Officers

The most important difference between a mortgage broker and a loan officer is that the latter is employed by a lending institution (a bank, credit union, or others) to process loans solely from the products of that institution. Although a loan officer may offer quite a range of loans, they are all programs with that one lender.

Your loan officer will represent you to the bank or other lending institution. The borrower is walked through the whole process, from loan selection to closing, by the loan officer. Either a salary or commission is given to mortgage brokers by their employers.