Ralston Mortgage, Broker, Loan Officer

Mortgage Broker vs. Mortgage Banker

When you work on your application for a mortgage loan, you may work with a mortgage banker or you may choose to work with a mortgage broker. As a new home is the result of the work of both mortgage broker and loan officer, people often confuse them. However, understanding the ways they differ is beneficial to your mortgage loan process.

Mortgage Brokers

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 for you and your lender, which can be one of the following: a bank, trust company, credit union, mortgage corporation, finance company or even a 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, private investor. A mortgage broker can examine your numbers to determine which lender is the right fit for you. Your broker will present your loan application to a handful of lenders, and works with the lender of choice until closing. The broker gets a commission from the borrower when the loan closes.

What is a Mortgage Banker?

Lending Institutions (banks, finance companies, and others) employ mortgage bankers to offer, and process loans solely on behalf of that particular institution. Although a mortgage banker may market quite a range of loans, they are all products from that specific lender.

A loan officer (also known as an "account executive" or "loan representative") acts on behalf of the borrower to the lender. The borrower is helped through the whole process, from selecting a loan to closing, by the mortgage banker. Either a salary or commission is given to mortgage brokers by their employers.