Mortgage Broker or Mortgage Banker

When you work on your application for a mortgage , you need to know the difference between a mortgage broker and a loan officer. People sometimes confuse the two job types because both will yield the same result: a new home. Yet understanding the ways they differ will be helpful to your mortgage process.

About Mortgage Brokers

A mortgage broker (either a company or an individual) is 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 bank, trust company, credit union, mortgage corporation, finance company or even an individual, private investor. You partner with a mortgage broker to look at your financial circumstance and find the lender who has the right loan for you. Your broker will submit your mortgage application to a handful of lenders, and works with the lender of choice until the loan closes. The broker receives a commission from the borrower when the loan closes.

About Loan Officers

Lending Institutions (banks, finance companies, and others) employ loan officers to promote, and process loans solely originated by that particular institution. Although a mortgage banker may offer quite a variety of loans, they all are programs with that specific lender.

Your loan officer will represent you to the bank or other lending institution. From selecting a loan program to closing, a mortgage banker can guide a borrower through the process. Mortgage bankers are compensated with a commission or salary for their work by their employers.