Mortgage Broker vs. Mortgage Banker

When you need a mortgage loan, you may work with a mortgage banker or you may choose to work with a mortgage broker. As both produce the same outcome (a new home), people usually confuse the two. Yet recognizing the differences between them is useful to your mortgage loan process.

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 for you and your lender, which can be one of the following: a credit union, bank, trust company, finance company, mortgage corporation or even an individual 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 an individual, private investor. You partner with a mortgage broker to review your financial circumstance and find the lender who has the right mortgage loan for you. Your broker will present your loan application to several lenders, and works with the lender of choice until closing. The broker receives a commission from the borrower if the loan closes.

What is a Loan Officer?

Loan officers represent a particular lending institution (such as a bank, credit union, etc.) who offer and process mortgages and other lending programs on behalf of their employer alone. There may be a wide range of loans types to choose from although all are programs of that particular lending institution.

Also called a "loan representative" or "account executive," a mortgage banker acts of behalf of the borrower to the lending institution. A loan officer will walk the borrower through the selection, processing and loan closing. Either a salary or commission is paid to mortgage brokers by their employers.

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