Know what to expect: Mortgage Brokers and Mortgage Bankers

When you apply for a mortgage loan, you need to know the difference between a loan officer and a mortgage broker. It's easy to confuse these as both will give the same outcome: a new home. Yet it is beneficial to understand the ways they differ so you know what to expect from them as you enter your mortgage application process.

About Mortgage Brokers

A mortgage broker is a person or company that is an independent agent for both the mortgage loan borrower and the lender. 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 an individual, 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 a private investor. Which lender has the loan programs that fits your financial situation? A mortgage broker will lead you to the best one. From application to closing, your mortgage broker facilitates the loan process: offering your application to several lenders, and walking you with the chosen lender through to closing. The borrower gives a commission to the broker at closing.

Mortgage Bankers

The biggest difference between a mortgage broker and a mortgage banker is that the latter is employed by a lending institution (a bank, credit union, or others) to offer and process loans solely from the products of that institution. There can be a variety of loans types to choose from although all are products of that particular lender.

Also called 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 loan selection to closing, by the loan officer. Either a salary or commission is paid to loan officers by their employers.

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