Know the difference: Mortgage Brokers and Mortgage Bankers

Either a mortgage broker or a loan officer can work with you when it's time to locate a mortgage loan. Because a new home is the outcome of the work of both mortgage broker and mortgage banker, people usually confuse the two job types. Yet understanding the ways they differ will be helpful to your mortgage loan process.

Mortgage Brokers

During the mortgage loan process, an individual or group who is an independent agent for both mortgage loan borrower and lender is a mortgage broker. Your mortgage broker will stand as coordinator between you and the lending institution; which can be a credit union, bank, trust company, finance company, mortgage corporation or even a private investor. Which lender offers the mortgage loans that is best for you? A mortgage broker will help you find the best one. Your broker will offer your loan application to several lenders, and works with the lender of choice until closing. If the loan closes, the broker's commission is paid by the borrower.

About Mortgage Bankers

Mortgage Bankers represent a particular lending institution (such as a bank, credit union, etc.) who work with mortgages and other loans for their company alone. There can be a wide range of loans types to choose from even though all are programs of that specific lending institution.

Also known as a "loan representative" or "account executive," a loan officer represents the borrower to the lender. From selecting a loan to closing, a mortgage banker can guide a borrower through the process. Either a salary or commission is paid to loan officers by their employers.