Mortgage Broker vs. Mortgage Banker

Either a mortgage broker or a mortgage banker can work with you when you work on your application for a mortgage loan. Since a new home is the outcome of the work of both mortgage broker and mortgage banker, people can confuse them. Yet it is helpful to recognize the difference between them so you know what to expect from them during your mortgage application process.

What is a Mortgage Broker?

A mortgage broker is someone or group that works as an independent agent for both the mortgage loan applicant and the lender. 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, private investor. A mortgage broker will consider your finances to find out which lender is the right fit for you. You give your mortgage application to your broker, who presents it to one or more lenders. Your mortgage broker then helps you work with the lender of choice until the closing of the loan. The borrower gives a commission to the broker at closing.

What is a Loan Officer?

Lending Institutions (banks, finance companies, and others) employ loan officers to market, and process loans solely from that specific institution. While a loan officer may promote quite a variety of loan programs, they are all programs with that lender alone.

A loan officer represents you to the bank or other lending institution. The loan officer can help you through the application, processing and loan closing. Mortgage bankers may be compensated with a commission or salary for their work by their employers.