Know what to expect: Mortgage Brokers vs. Mortgage Bankers

Either a mortgage broker or a mortgage banker may help you when you apply for a mortgage . Since both a mortgage broker and mortgage banker will help you purchase a new home, people frequently confuse the two. However, it will be helpful to understand the difference between them so you know what to expect from them during the mortgage application process.

Mortgage Brokers

A mortgage broker (either a company or an individual) is an independent agent for both the mortgage loan borrower and the lender. 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 an individual, 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. A mortgage broker will examine your financial situation to find out which lender is the best fit for you. Your broker will present your mortgage application to several lenders, and works with the lender of choice until the loan closes. The borrower pays a commission to the broker at closing.

Loan Officers

Lending Institutions (banks, finance companies, and others) employ mortgage bankers to offer, and process mortgage loans on behalf of that specific institution alone. They may be able to market loans to fit a variety of situations, but all the loans will be programs from the same lender.

Also called a "loan representative" or "account executive," a loan officer represents the borrower to the lending institution. The borrower is guided through the whole process, from loan selection to closing, by the loan officer. Mortgage bankers will be given a commission or salary for their services by their employers.