Know the difference: Mortgage Brokers and Mortgage Bankers

Either a mortgage broker or a loan officer may work with you when you work on your application for a mortgage . As a new home is the result of the work of both mortgage broker and loan officer, people frequently confuse them. But as you begin the application process, it will help if you recognize they ways they differ.

About Mortgage Brokers

A mortgage broker (either a group or an individual) is an independent agent for the mortgage loan borrower as well as the lender. A mortgage broker coordinates things for you and your lender, which can be one of the following: a credit union, bank, trust company, finance company, mortgage corporation or even an individual, private investor. Acting as a facilitator between you and your lender, your mortgage broker can match you with a credit union, bank, trust company, finance company, mortgage corporation or even an individual investor. Which lender has the loans that fits your financial situation? A mortgage broker will guide you to the right fit. From application to closing, your mortgage broker works with you: offering your loan application to several lenders, and walking you with the chosen lender through to closing. The borrower submits a commission to the broker upon closing.

What is a Loan Officer?

The biggest difference between a mortgage broker and a mortgage banker is that the latter is employed by a lending institution (a bank, credit union, or others) to promote and process loans solely originated from the products of that institution. While a mortgage banker may offer quite a variety of loans, they will be programs from that lender alone.

Also called a "loan representative" or "account executive," a loan officer represents the borrower to the lender. A loan officer can walk you through the selection, processing and loan closing. Mortgage bankers may be given a commission or salary for their work by their employers.