Know what to expect: Mortgage Brokers vs. Mortgage Bankers

When it's time to find a mortgage , you should know the difference between a mortgage broker and a mortgage banker. People usually confuse them because both will yield the same result: a new home. Yet it is important to recognize how they differ so you know what to expect from them as you enter the mortgage application process.

About Mortgage Brokers

During the mortgage loan process, an individual or firm who is an independent agent for both mortgage loan applicant and lender is a mortgage broker. A mortgage broker coordinates 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 credit union, bank, trust company, finance company, mortgage corporation or even an individual, private investor. Which lender offers the loan programs that is right for you? A mortgage broker will guide you to the right fit. Your broker will offer your loan application to one or more lenders, and works with the lender of choice until closing. The broker is given a commission from the borrower if the loan closes.

What is a Mortgage Banker?

Lending Institutions (banks, finance companies, and others) employ loan officers to promote, and process loans solely originated by that particular institution. There may be a wide range of loans types to choose from, but all are products of that specific lending institution.

Also known as a "loan representative" or "account executive," a mortgage banker represents the borrower to the lending institution. The borrower is helped through the entire process, from finding the loan to closing, by the mortgage banker. Loan officers are given a commission or salary for their work by their employers.