Mortgage Broker vs. Mortgage Banker

When you need a mortgage loan, you need to know the difference between a loan officer and a mortgage broker. It's common to confuse the two as both will reap the same result: a new home. However, it is useful to recognize the difference between them so you have clear expectations of them during your mortgage application 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 facilitator between you and the lending institution; which may be a credit union, bank, trust company, finance company, mortgage corporation or even an individual investor. Which lender has the mortgage loans that fits your needs? A mortgage broker will help you find the best fit. From application to closing, your mortgage broker works with you: submitting your mortgage application to a number of lenders, and walking you with the chosen lender through to closing. The borrower submits a commission to the broker upon closing.

What is a Mortgage Banker?

Loan officers represent a specific lending institution (such as a bank) who work with mortgages and other loan programs from their employer alone. While a mortgage banker may promote quite a variety of loans, they will be products from that one lender.

Your loan officer will represent you to the bank or other lending institution. The loan officer can help you through the selection, processing and closing of the loan. Lending institutions compensate their loan officers with a commission or salary.

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