Mortgage Banker: What it is, How it Works

What Is a Mortgage Banker?

A mortgage banker originates mortgages using their own or borrowed funds. They may retain or sell the mortgage after it is originated, and they may service the mortgage or sell the servicing rights. Their primary business is earning fees from loan origination.

Key Takeaways

• A mortgage banker originates mortgages using their own or borrowed funds.
• They earn fees from loan origination and can approve or reject mortgage applications.
• Mortgage bankers also advise borrowers in choosing the best option.
• Mortgage bankers use their own funds, while mortgage brokers facilitate originations for other institutions.

Understanding Mortgage Bankers

A mortgage banker works in the loan department of a financial institution, assisting borrowers throughout the mortgage process. They evaluate properties, collect financial information, and secure loans. They also advise borrowers on the institution’s loan options.

Mortgage bankers close loans in their own names, using their own or their institution’s funds.

Mortgage bankers are paid by their institutions and must ensure secure loans and qualified borrowers. Larger mortgage bankers service mortgages, while smaller ones sell servicing rights.

A mortgage banker can approve loans on behalf of the lender, making exceptions or subjective decisions when necessary.

Mortgage Banker vs. Mortgage Broker

A mortgage banker and a mortgage broker both help individuals obtain home loans. However, mortgage bankers close mortgages in their own names using their own funds, while mortgage brokers facilitate originations for other institutions. Mortgage brokers search for suitable loans for individuals.