Mortgage Broker and Mortgage Banker

When it's time to get a mortgage , you should know the difference between a mortgage broker and a loan officer. Because a new home is the result of the work of both mortgage broker and mortgage banker, it's understandable to confuse the two. However, understanding how they differ is useful to the mortgage loan process.

Mortgage Brokers

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. A mortgage broker facilitates things between you and your lender, which can be one of the following: a bank, trust company, credit union, mortgage corporation, finance company or even a private investor. Acting as a facilitator between you and your lender, your mortgage broker can match you with a bank, trust company, credit union, mortgage corporation, finance company or even an individual investor. You work with a mortgage broker to analyze your financial circumstance and lead you to the lender who has the best loan program for you. Your broker will present your loan application to various lenders, and works with the lender of choice until closing. The broker receives a commission from the borrower upon closing.

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 offer and process loans only from that institution. Although a loan officer may market quite a variety of loans, they all are products of that lender alone.

A mortgage banker (also known as an "account executive" or "loan representative") acts on behalf of the borrower to the lender. The borrower is guided through the entire process, from loan selection to closing, by the mortgage banker. Mortgage bankers may be compensated with a commission or salary for their work by their employers.

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