The Difference Between Mortgage Bankers, Mortgage Brokers, and Retail Banks in the Mortgage Process

A mortgage broker is a third party provider that arranges mortgage financing with lenders

A mortgage banker is a direct lender whose sole expertise is mortgages

A retail bank is a bank who sells financial services. Their main focus is not on mortgages.

Mortgage Brokers    

Advantages-multiple lenders to choose from

Disadvantages–not empowered to make mortgage loans, inflexible pricing & no control

Mortgage Bankers    

Advantages –the same advantages of a mortgage broker + flexible and competitive pricing, the ability to approve and fund loans without other’s permission, mortgage specialists

Disadvantages–lack of a national brand name

Retail Banks      

Advantages-brand name

Disadvantages-only 1 set of guidelines whereby if the bank cannot secure the loan or offer a good rate, the salesperson has no other option and the client has to reapply to others, not aggressively priced in a rising rate environment

As the author of this blog, I am promoting the virtues of a mortgage banker.  We were brokers for over 20 years and still broker some difficult transactions.  We have all of the advantages in pricing and products with the ability to approve our loans from our headquarters in NYC.  We have the ability to do almost every type of transaction at the best possible rate in the most service oriented manner possible.  Whether good or bad markets, rising or declining rates, mortgage bankers are mortgage specialists that focus just on mortgages.

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