Know the difference: Mortgage Brokers vs. Mortgage Bankers

When it comes to locating a mortgage , you may work with a loan officer or you may choose to work with a mortgage broker. As a new home is the result of the work of both mortgage broker and mortgage banker, people usually confuse the two job types. Yet it will be important to know the difference between the two jobs so you know what to expect from them as you enter the mortgage process.

What is a Mortgage Broker?

During the mortgage loan process, an individual or company who is an independent agent for both mortgage loan applicant and lender is a mortgage broker. Your mortgage broker will stand as facilitator between you and the lending institution; which can be a credit union, bank, trust company, finance company, mortgage corporation or even an individual investor. Which lender offers the loan programs that is best for you? A mortgage broker will lead you to the right one. From application to closing, your mortgage broker works with you: offering your mortgage application to several lenders, and coordinating the process with the lender through to closing. The broker gets a commission from the borrower upon closing.

Loan Officers

Loan officers work for a specific lending institution (such as a bank, credit union, etc.) who process mortgages and other loan programs originated by their company alone. While a loan officer may promote quite a variety of loan programs, they will be programs from that lender alone.

Your mortgage banker will represent you to the bank or other lending institution. From finding a loan program to closing, a mortgage banker will walk you through the process. Mortgage bankers are given a commission or salary for their work by their employers.