Know what to expect: Mortgage Brokers and Mortgage Bankers

Either a mortgage broker or a mortgage banker may assist you when it comes to getting a mortgage . Since both reap the same outcome (a new home), it's understandable to confuse the two job types. Yet understanding how they are different will be important to your mortgage loan process.

Mortgage Brokers

A mortgage broker (either a firm or an individual) is an independent agent for both the mortgage loan applicant and 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 a 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. You work with a mortgage broker to look at your financial circumstance and lead you to the lender who has the best mortgage loan for you. Your broker will present your mortgage application to various lenders, and works with the lender of choice until closing. The borrower gives a commission to the broker at closing.

About Loan Officers

Mortgage Bankers represent a specific lending institution (such as a bank) who promote and process mortgages and other loans on behalf of their employer alone. They may be able to offer loans to fit a variety of situations, but all the loans will be products of the same lender.

A loan officer (also called an "account executive" or "loan representative") represents the borrower to the lender. From selecting a loan program to closing, a loan officer can walk the borrower through the process. Loan officers can be compensated with a commission or salary for their services by their employers.