What is the difference between a mortgage banker and a mortgage broker?

A mortgage banker is a direct lender because it lends you its own money; they may also sometime sell off these mortgages on the secondary market in order to reduce risks. Mortgage bankers are also the ones responsible for servicing your loans once the borrowed money has been disbursed to you. A mortgage broker is a middleman, just like a real estate agent; he does the loan shopping and analysis for the borrower and puts the lender and borrower together. Using a mortgage banker does not mean that you can shave off extra closing fees that might be generated from using a middle man, because a mortgage broker often does not charge any fees for his service. A mortgage banker can give you direct loan approval, whereas a broker gives you information second-hand. However, many mortgage banks are limited in what they can offer, which is essentially their own product. In addition, if you present your loan application in a poor light, you've already made a bad impression. I am not suggesting ...

A mortgage banker or lender is generally assumed to originate and fund their own loans, which are then sold on the secondary market, usually to Fannie Mae, Freddie Mac, or Ginnie Mae. Mortgage banking firms are often affiliated with traditional retail banks, and in some instances will service loans in their own portfolios. The loan underwriting (decision making) is typically internal to the company. A mortgage broker is a mortgage company that originates applications for loans, then places those loans with a variety of other lending institutions for initial funding with whom they usually have pre-established relationships. A mortgage broker is a person or entity that specializes in loan originations, receiving a commission to match borrowers and lenders. The Mortgage Broker performs some or most of the loan processing functions such as taking loan applications, ordering credit reports, appraisals, and title reports. Typically the Mortgage Broker does not underwrite the loan and ...  more

A mortgage banker profits from the interest rate that they offer the borrower, so when they offer you a rate, the banker also benefits. A mortgage broker can work with many lenders and bankers and offer a wider selection of loan programs and interest rates.  more

A mortgage banker works directly for a bank or lending institution. A mortgage broker has access to loan programs of many different banks or lending institutions. It is a personal decision to whether someone uses a banker or a broker.  more

A Mortgage Banker lends their own money to you to buy a home. A Mortgage Broker works with many different lenders to find a company to lend you the money to purchase a home. There are advantages to both. Since a Mortgage Banker, is lending their own money, they MIGHT be able to get you better terms or possibly lend you money even if your credit isn't perfect. "Might" is the key word. You'll need to shop around if that's what you need. And that is what a mortgage broker does, shops around for a lender that fits your needs. They work with multiple lenders, so often they can find the best terms and conditions. The choice of a lender is ultimately up to you. Get recommendations from your realtor, and your friends and family.

Mortgage bankers originate, and "fund," the mortgages that they sell, meaning they put up the money and handle the closing for the loans. Mortgage brokers are middlemen who shop different originators to find the deal that best suits their customers. Walden Mortgage Group is a correspondent lender, which means we have a direct lending relationship which enables us to work directly with the source of the money to ensure prompt closings. Our broker relationships also allow us to be flexible in our product lines and pricing. We have the best of both worlds!  more

A Mortgage Banker (or Lender) is often associated with a Bank. They do all of their lending functions "in-house" but are limited to only the loan programs their banks have. A Mortgage Broker has accounts with numerous banks/lenders and can choose the lender program best suited to satisfy the borrower's needs.  more