Mortgage Broker vs. Mortgage Banker

When you apply for a mortgage , you may work with a mortgage banker or you may choose to work with a mortgage broker. As both a mortgage broker and mortgage banker will help you purchase a new home, it's easy to confuse the two. Yet it will be useful to know how they differ so you have clear expectations of them as you enter your mortgage application process.

About Mortgage Brokers

During the mortgage loan process, an individual or group 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 can be a bank, trust company, credit union, mortgage corporation, finance company or even an individual investor. A mortgage broker will look at your numbers to find out which lender is the right fit for you. Your broker will offer your mortgage loan application to several lenders, and works with the lender of choice until the loan closes. The broker receives a commission from the borrower upon closing.

About Mortgage Bankers

Lending Institutions (banks, finance companies, and others) employ mortgage bankers to promote, and process loans solely originated by that specific institution. While a loan officer may market quite a range of loan programs, they will be products with that lender alone.

Also called a "loan representative" or "account executive," a mortgage banker represents the borrower to the lending institution. The borrower is helped through the whole process, from loan selection to closing, by the loan officer. Either a salary or commission is given to mortgage brokers by their employers.

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