Know what to expect: Mortgage Brokers vs. Mortgage Bankers

When you're looking to get a mortgage loan, you may work with a mortgage banker or you may choose to work with a mortgage broker. People can confuse these because both will yield the same result: a new home. However, it is useful to recognize the difference between the two jobs so you know what to expect from them during the mortgage process.

About 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 may be a credit union, bank, trust company, finance company, mortgage corporation or even an individual investor. A mortgage broker will look at your finances to find out which lender is the right fit for you. You give your mortgage application to your broker, who offers it to various lenders. Your mortgage broker then assists your work with the lender of choice until closing. The borrower pays a commission to the broker when the loan closes.

What is a Loan Officer?

Lending Institutions (banks, finance companies, and others) employ mortgage bankers to promote, and process loans solely on behalf of that specific institution. They may have the ability to promote loans to fit a variety of situations, but all the loans are products from the same lender.

Also known as a "loan representative" or "account executive," a loan officer represents the borrower to the lending institution. The borrower is helped through the entire process, from selecting a loan to closing, by the loan officer. Mortgage bankers will be compensated with a commission or salary for their work by their employers.