• Corporate
  • News
  • What's the Difference Between a Mortgage Banker and a Mortgage Broker?

What's the Difference Between a Mortgage Banker and a Mortgage Broker?

  • October 10, 2014

Both a mortgage banker and a mortgage broker can help you buy a home. So what’s the difference between the two—and more importantly—which one might be better for you?
Mortgage bankers are direct lenders.
A mortgage banker works directly with the lending institution (such as a bank) that provides the money for your mortgage. He or she can obtain funds only from that institution and is responsible for all aspects of the mortgage process, including evaluating the property, gathering your financial information, advising you of various mortgage options and overseeing the application process.
Mortgage brokers shop several lenders.
A mortgage broker functions like a “middle man” between you and the lending institution. Unlike a mortgage banker who has only one source of mortgage funding, a mortgage broker has several. For example, a broker might compare mortgage options from a nationwide commercial bank, a community bank and a local credit union. A mortgage banker can’t do that.
A broker will work with your real estate professional and you to determine your mortgage needs and then will “shop” for the best loan package to meet those needs. While a broker will do much of the paperwork, the lender decides whether you qualify for the loan and what your interest rate and mortgage terms will be. A broker can’t make those decisions.
Which is best for you: mortgage banker or broker?
If you don’t have time to shop for the right mortgage, a broker can save you a lot of time. He or she can also handle a lot of the paperwork and interaction with the lender. Also, if you have had any credit issues in the past, a broker may be able to navigate the mortgage process more effectively than you might do on your own—helping you find the best mortgage solution for your financial situation. Brokers are expected to understand the lender’s mortgage underwriting guidelines and can spot any issues with your loan application before you submit it.
While a mortgage broker can’t approve your mortgage, a mortgage banker can. Remember, a mortgage banker works for the lending institution that is providing the money for your mortgage. That can make the difference between a “yes” and a “no” when there’s a gray area that requires an exception or subjective decision. Also, if you already have a long-term relationship with the lending institution, you might get more favorable treatment.

  • Facebook Icon
  • Linked In Icon
  • Twitter Icon
  • Google Plus Icon

Latest Tweets

© CMG Financial, All Rights Reserved. CMG Financial is a registered trade name of CMG Mortgage, Inc., NMLS ID #1820 in most, but not all states. CMG Mortgage, Inc. is an equal opportunity lender with corporate office located at 3160 Crow Canyon Road, Suite 400, San Ramon, CA 94583 888-264-4663. Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act No. 4150025; AK #AK1820; AZ #0903132; Colorado regulated by the Division of Real Estate; Georgia Residential Mortgage Licensee #15438; Illinois Residential Mortgage Licensee; Kansas Licensed Mortgage Company #MC.0001160; Massachusetts Mortgage Lender License #MC1820 and Mortgage Broker License #MC1820; Mississippi Licensed Mortgage Company Licensed by the Mississippi Department of Banking and Consumer Finance; Licensed by the New Hampshire Banking Department; Licensed by the NJ Department of Banking and Insurance; Licensed Mortgage Banker – NYS Department of Financial Services; Ohio Mortgage Broker Act Mortgage Banker Exemption #MBMB.850204.000; Licensed by the Oregon Division of Financial Regulation #ML-3000; Rhode Island Licensed Lender #20142986LL; and Licensed by the Virginia State Corporation Commission #MC-5521. CMG Mortgage, Inc. is licensed in all 50 states and the District of Columbia. Offer of credit is subject to credit approval. For information about our company, please visit us at www.cmgfi.com. To verify our complete list of state licenses, please visit www.cmgfi.com/corporate/licensing and NMLS Consumer Access (http://www.nmlsconsumeraccess.org/EntityDetails.aspx/COMPANY/1820).