Mortgage Broker vs. Mortgage Banker
Either a mortgage broker or a mortgage banker may work with you when it's time to locate a mortgage loan. People usually confuse these because both will give the same result: a new home. But for the application process, it can benefit you if you understand how they differ.
What is a Mortgage Broker?
A mortgage broker (either a company or an individual) is an independent agent for both the mortgage loan borrower and the lender. A mortgage broker facilitates things between you and your lender, which can be one of the following: a credit union, bank, trust company, finance company, mortgage corporation or even an individual, private 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 an individual investor. Which lender offers the loan programs that is right for you? A mortgage broker will guide you to the right fit. You deliver your loan application to your broker, who submits it to one or more lenders. Your mortgage broker then helps you work with the lender chosen until the loan closes. The borrower submits a commission to the broker if the loan closes.
What is a Mortgage Banker?
The most important difference between a mortgage broker and a loan officer is that the latter is employed by a lending institution (a bank, credit union, or others) to offer and process loans solely originated from that institution. They may be able to market 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 represents the borrower to the lending institution. From finding a loan program to closing, a loan officer can help a borrower through the process. Lending institutions compensate their mortgage bankers with a commission or salary.
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