Mortgage Broker vs. Mortgage Banker

Either a mortgage broker or a loan officer can assist you when it comes to applying for a mortgage loan. Because both a mortgage broker and lending officer can help you fund a new home, it's easy to confuse the two. But for the application process, it can help if you know their differences.

Mortgage Brokers

A mortgage broker (either a company 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 bank, trust company, credit union, mortgage corporation, finance company or even a private investor. You work with a mortgage broker to look at your financial circumstance and find the lender who has the right loan for you. You deliver your loan application to your broker, who offers it to several lenders. Your mortgage broker then helps you work with the lender of choice until the closing of the loan. At closing, the broker's commission is given by the borrower.

Loan Officers

Mortgage Bankers represent a specific lending institution (such as a bank, credit union, etc.) who offer and process mortgages and other loans on behalf of their employer alone. They may be able to offer loans to fit many different situations, but all the loans will be programs from the same lender.

Also known as a "loan representative" or "account executive," a mortgage banker acts of behalf of the borrower to the lender. The loan officer can guide the borrower through the application, processing and closing of the loan. Loan officers can be compensated with a commission or salary for their work by their employers.

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