Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Mortgage Banker

What it is:

A mortgage banker is a person or entity who lends mortgages.

How it works (Example):

A mortgage banker may be a sole agent or larger institution that originates mortgages to property buyers in exchange for a commission. Larger institutional lenders, like banks, often service the mortgage for its entire term (for example, collecting monthly payments). Individual mortgage bankers and smaller mortgage lending companies frequently sell mortgages to larger lenders.

Why it Matters:

Mortgage bankers originate mortgages using their own money or money loaned from a third party. For this reason, it can sometimes be more advantageous for them to sell their mortgages to another lender because it provides them with funds to originate additional mortgages and continue to earn commissions.