Mortgage Broker vs. Mortgage Banker

When it comes to getting a mortgage loan, you may work with a mortgage banker or you may choose to work with a mortgage broker. As a new home is the outcome of the work of both mortgage broker and mortgage banker, people frequently confuse the two job types. Yet it is valuable to understand the difference between them so you have clear expectations of them as you enter your mortgage process.

About Mortgage Brokers

During the mortgage loan process, an individual or firm who is an independent agent for both mortgage loan borrower and lender is a mortgage broker. A mortgage broker facilitates things for 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 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 a private investor. You use a mortgage broker to examine your financial situation and find the lender who has the best mortgage loan for you. Your broker will submit your mortgage application to one or more lenders, and works with the lender of choice until closing. The broker gets a commission from the borrower when the loan closes.

What is a Mortgage Banker?

The most important difference between a mortgage broker and a mortgage banker is that a mortgage banker works for a lending institution (a bank, credit union, or others) to process loans only originated from the products of that institution. They may be able to promote loans to fit many different situations, but all the loans will be programs from the same lender.

Also known as a "loan representative" or "account executive," a loan officer acts of behalf of the borrower to the lending institution. The borrower is walked through the whole process, from selecting the loan to closing, by the mortgage banker. Mortgage bankers may be paid a commission or salary for their work by their employers.

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