When seeking financing to buy a home, many homeowners work with either a mortgage broker or a mortgage banker. While the terms are often used interchangeably, brokers and bankers play different roles in the mortgage industry.
Here is a quick guide to mortgage bankers to help you learn more:
Mortgage banker vs mortgage broker
While they have similar names, mortgage brokers and mortgage bankers have very different jobs. A mortgage broker will assist you in finding a good deal on mortgage loans from multiple lenders. A mortgage banker actually originates and funds the loan.
Unlike banks, mortgage brokers are not financing loans themselves — they simply help you choose a loan that best suits you. A lender uses their cash to provide borrowed money, while the broker provides only assistance from the lender to the borrower.
Understanding mortgage bankers: What do they do?
Mortgage bankers usually work for banks in a specific lending department. Their work involves evaluating mortgage applications to determine if a potential borrower meets the financial institution requirements. Some mortgage bankers specialize in a specific type of mortgage, which can be helpful for borrowers with unique circumstances.
Other services & responsibilities
Mortgage bankers may also service or sell loans. As a loan servicer, they handle the payment processing aspect of the loan. This can include managing escrow accounts and providing payoff letters.
Some mortgage bankers sell loans to third-party servicers. This gives them a better opportunity to provide loans to additional borrowers, since it frees up their cash on hand.
How do you choose between a mortgage banker and a mortgage broker? There are advantages and disadvantages to both options, and much of the choice comes down to personal preference.
However, understanding the way a mortgage banker works in comparison with how a mortgage broker works will help loan applicants make the best decision for their financial future.
About the Author
Rick Murray
Hi, I'm Rick Murray and I'd be honored to put my real estate experience to work for you. Whether you're in the research phase at the beginning of your real estate search or you know exactly what you're looking for, you'll benefit from having a real estate professional by your side.
My professional background is a combination of 23 years of mortgage experience, 17 years of real estate experience and 18 years as a licensed broker, along with having many designations to always be up to date and knowledgeable in sales, digital marketing, negotiations, financing options available for today's consumer. Being a community expert, resident of Santa Clarita Valley for 47 years, licensed broker since 2005, and knowing how to negotiate. I am the right choice when Buying, Selling, Financing your largest investment. You will always be a lifetime client, never a past client!