Know what to expect: Mortgage Brokers and Mortgage Bankers

When it's time to get a mortgage loan, you may work with a mortgage banker or you may choose to work with a mortgage broker. As a new home is the outcome of the work of both mortgage broker and loan officer, people can confuse the two. Yet it will be useful to know the difference between them so you have clear expectations of them as you enter the mortgage application process.

Mortgage Brokers

During the mortgage loan process, an individual or company who is an independent agent for both mortgage loan borrower and lender is a mortgage broker. 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 a private investor. You use a mortgage broker to review your financial situation and lead you to the lender who has the right mortgage loan for you. You deliver your mortgage loan application to your broker, who submits it to a number of lenders. Your mortgage broker then guides your work with the lender of choice until closing. The borrower submits a commission to the broker when the loan closes.

What is a Mortgage Banker?

Loan officers work for a particular lending institution (such as a bank, credit union, etc.) who process mortgages and other loan products from their employer alone. They may be able to offer loans to fit a variety of situations, but all the loans are programs of the same lender.

Your mortgage banker represents you to the bank or other lending institution. The borrower is helped through the entire process, from loan selection to closing, by the mortgage banker. Either a salary or commission is given to loan officers by their employers.