Mortgage Broker vs. Mortgage Banker

When you're looking to get a mortgage , you should know the difference between a mortgage broker and a loan officer. As both a mortgage broker and mortgage banker will help you buy your new home, it's understandable to confuse the two. However, it will be beneficial to understand the ways they differ 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 firm who is an independent agent for the mortgage loan borrower as well as the lender is a mortgage broker. Your mortgage broker will stand as coordinator between you and the lending institution; which can be a credit union, bank, trust company, finance company, mortgage corporation or even a private investor. Which lender has the loan programs that is right for you? A mortgage broker will guide you to the right one. Your broker will offer your mortgage loan application to one or more lenders, and works with the lender of choice until the loan closes. When the loan closes, the broker's commission comes from the borrower.

What is a Loan Officer?

Loan officers are representatives of a particular lending institution (such as a bank) who work with mortgages and other lending programs for their company alone. Although a mortgage banker may promote quite a variety of loan programs, they are all products of that lender alone.

A mortgage banker represents you to the bank or other lending institution. From choosing a loan to closing, a mortgage banker will walk you through the process. Either a salary or commission is paid to loan officers by their employers.