Mortgage Broker or Mortgage Banker

Either a mortgage broker or a loan officer can help you when you apply for a mortgage loan. People sometimes confuse them because both will reap the same outcome: a new home. However, understanding the differences between them will be important to the mortgage process.

What is a Mortgage Broker?

During the mortgage loan process, an individual or company who is an independent agent for the mortgage loan borrower as well as the lender is a mortgage broker. 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. A mortgage broker will examine your numbers to find out which lender is the best fit for your loan needs. From application to closing, your mortgage broker facilitates the loan process: submitting your mortgage application to a number of lenders, and walking you with the chosen lender through to the closing of the loan. At closing, the broker's commission is given by the borrower.

About Mortgage Bankers

The biggest difference between a mortgage broker and a loan officer is that the latter works on behalf of a lending institution (a bank, credit union, or others) to process loans solely from that institution. Although a loan officer may offer quite a variety of loan programs, they are all programs of that specific lender.

A mortgage banker (also called an "account executive" or "loan representative") acts on behalf of the borrower to the lender. The mortgage banker will guide the borrower through the application, processing and closing of the loan. Loan officers may be compensated with a commission or salary for their services by their employers.

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