Know what to expect: Mortgage Brokers vs. Mortgage Bankers

When you apply for a mortgage , you may work with a mortgage banker or you may choose to work with a mortgage broker. It's understandable to confuse the two because both will reap the same result: a new home. Yet understanding how they are different will be useful to the mortgage process.

About Mortgage Brokers

A mortgage broker is someone or firm that is an independent agent for the mortgage loan borrower as well as the lender. A mortgage broker facilitates things for 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 bank, trust company, credit union, mortgage corporation, finance company or even a private investor. You partner with a mortgage broker to review your financial situation and find the lender who has the best loan for you. You give your mortgage loan application to your broker, who submits it to a number of lenders. Your mortgage broker then helps you work with the lender of choice until the closing of the loan. At closing, the broker's commission comes from the borrower.

Loan Officers

The most important difference between a mortgage broker and a mortgage banker is that a mortgage banker works on behalf of a lending institution (a bank, credit union, or others) to process loans only from that institution. While a loan officer may market quite a range of loan programs, they are all products from that one lender.

A mortgage banker will represent you to the bank or other lending institution. From choosing a loan product to closing, a mortgage banker can help a borrower through the process. Lenders give their loan officers a salary or commission.

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