Know what to expect: Mortgage Brokers and Loan Officers

Either a mortgage broker or a mortgage banker may work with you when you're looking to get a mortgage loan. Because a new home is the result of the work of both mortgage broker and mortgage banker, people usually confuse the two. But for the application process, it will help if you understand their differences.

What is a Mortgage Broker?

A mortgage broker is an individual or company that is 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 bank, trust company, credit union, mortgage corporation, finance company or even a private investor. A mortgage broker will look at your numbers to determine which lender is the best fit for you. You deliver your mortgage loan application to your broker, who submits it to several lenders. Your mortgage broker then guides your work with the lender of choice until the loan closes. At closing, the broker's commission comes from the borrower.

Mortgage Bankers

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

Your loan officer will represent you to the bank or other lending institution. From selecting a loan program to closing, a mortgage banker will walk a borrower through the process. Either a salary or commission is paid to loan officers by their employers.