What is a Mortgage Banker?

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

How Does a Mortgage Banker Work?

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 Does a Mortgage Banker Matter?

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.