Know what to expect: Mortgage Brokers vs. Mortgage Bankers

Either a mortgage broker or a loan officer may work with you when it's time to find a mortgage . People often confuse the two job types since both will yield the same outcome: a new home. Yet recognizing the differences between them will be important to the mortgage process.

About Mortgage Brokers

A mortgage broker (either a firm or an individual) is an independent agent for both the mortgage loan borrower and the lender. Your mortgage broker will stand as facilitator between you and the lending institution; which may be a bank, trust company, credit union, mortgage corporation, finance company or even an individual, private investor. A mortgage broker will analyze your numbers to find out which lender is the best fit for your loan needs. Your broker will submit your mortgage loan application to a handful of lenders, and works with the lender of choice until the loan closes. Upon closing, the broker's commission comes from the borrower.

Mortgage Bankers

The biggest difference between a mortgage broker and a mortgage banker is that the latter works on behalf of a lending institution (a bank, credit union, or others) to offer and process loans solely from the programs of that institution. They may be able to promote loans to fit a variety of situations, but all the loans will be programs from the same lender.

Also called a "loan representative" or "account executive," a loan officer represents the borrower to the lending institution. From selecting a loan to closing, a mortgage banker will help you through the process. Lenders pay their loan officers a salary or commission.

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