Know what to expect: Mortgage Brokers vs. Mortgage Bankers

When you apply for a mortgage loan, you need to know the difference between a mortgage banker and a mortgage broker. As a new home is the outcome of the work of both mortgage broker and loan officer, it's easy to confuse the two job types. However, it is helpful to recognize the ways they differ so you have clear expectations of them during your 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 borrower and lender is a mortgage broker. 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 a private investor. A mortgage broker can consider your numbers to find out which lender is the best fit for you. You give your application to your broker, who submits it to a number of lenders. Your mortgage broker then guides your work with the lender chosen until the closing of the loan. If the loan closes, the broker's commission is paid by the borrower.

What is a Mortgage Banker?

Mortgage Bankers represent a specific lending institution (such as a bank, credit union, etc.) who offer and process mortgages and other lending programs originated by their employer alone. They may have the ability to market loans to fit many different situations, but all the loans will be programs of the same lender.

A mortgage banker represents you to the bank or other lending institution. From finding a loan to closing, a loan officer will help the borrower through the process. Lenders pay their loan officers a salary or commission.

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