What is a mortgage banker? Services, responsibilities and more

Jul 10, 2025

4-minute read

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A banker discussing a loan with a couple.

Buying a house typically involves getting a mortgage to pay for it. In the way that a real estate agent helps you find a house and close on the purchase, a mortgage banker works with you to find a home loan and close on the mortgage.

A mortgage banker is not quite the same as a mortgage broker. Both a mortgage banker and a broker can help you find a home loan, but the two roles operate differently. Here, we’ll focus on what a mortgage banker is, their roles and responsibilities, and how they work to get you financing for a home purchase.

Mortgage banker, defined

A mortgage banker originates, funds, and sometimes services mortgage loans. Mortgage bankers are employed by a financial institution that issues loans through. The funds for these loans come from either that financial institution or are borrowed from a warehouse lender.

Borrowers work with the mortgage banker throughout the underwriting and approval process. Mortgage bankers make money off the transaction by charging origination fees. Mortgage bankers can, in some cases, sell a loan after it closes to an investor or a government-backed enterprise such as Freddie Mac or Fannie Mae.

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What does a mortgage banker do?

Mortgage bankers work with borrowers for the entire home loan origination process, which includes:

  • Completing the application
  • Underwriting the mortgage
  • Closing the loan

Mortgage bankers help borrowers choose the right loan for their situation from the products offered by their institution. Bankers are only able to issue loans through their employer, so the borrower must meet that financial institution’s requirements.

Once the application is submitted, the banker processes the loan. Then, the underwriting process verifies the borrower’s finances and eligibility for the loan. If everything checks out, the banker will fund and close the loan.

After closing, the mortgage banker has two options: Sell the loan to an investor or keep it in their financial institution’s portfolio for servicing. Loan servicing involves processing payments and managing escrow accounts until the mortgage is paid off.

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What are a mortgage banker’s responsibilities?

Most mortgage bankers offer the following services through the company they represent:

  • Originating loans: Mortgage bankers originate loans by taking a borrower’s loan application and processing it. Together with the underwriting team, they’ll determine if the borrower meets the lending institution’s guidelines. Many mortgage bankers specialize in certain loan types designed to meet the needs of borrowers with different circumstances.
  • Servicing loans: Some lenders keep the loans they fund on their books and service them. This means they collect the borrower’s monthly payments, manage their escrow accounts, and provide payoff letters when the loan has been repaid.
  • Selling loans: Some lenders immediately sell the loans they originate to free up capital to issue more mortgages. Lenders can sell the entire loan or the loan servicing rights on the secondary mortgage market. If a lender sells the loan, it changes who the borrower makes their mortgage payments to or who they call for assistance with their loan, but none of the terms of the loan change.

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What’s the difference between a mortgage banker and a mortgage broker?

Mortgage brokers originate loans in a different way. Unlike mortgage bankers, brokers don’t underwrite or fund the loan themselves. Instead, they work as a neutral third party that brings together the borrower and the bank. Brokers work with a variety of lenders, providing borrowers with more options to find a suitable loan.

The primary difference between mortgage bankers and brokers is how the loan closes. Mortgage bankers close the loan in their name and use their funds. Mortgage brokers facilitate the closing, but the lender funds the loan.

Next step: Finding the right mortgage lender

Finding the right mortgage lender is just as important as finding the right house. You’ll be entering into a serious, long-term financial relationship with your lender, so you’ll want to find one that’s reputable. The terms offered by your lender determine how much the house costs each month and over the long term. Here are some steps to take to find a mortgage lender and get the right mortgage.

Increase your credit score

Borrowers with higher credit scores typically get offered lower interest rates than borrowers with lower credit scores. Lenders use your credit score to determine how reliable you are as a borrowed based on how responsible you’ve been with debt in the past.

A high credit score demonstrates financial responsibility and secures the best terms. A low credit score can result in declined applications or unaffordable terms. If your credit isn’t so great, that doesn’t mean that homeownership is out of reach. There are steps you can take to repair your credit before applying for a mortgage to give you access to a wider variety of loan options and better terms.

Shop around for loans

When searching for a mortgage, research different lenders and compare the interest rates, fees, and closing costs for each loan option. Keep in mind that sometimes low interest rates come with higher fees. At first, it might seem like the loan with the lower interest rate is the better deal, but when you factor in the fees, it actually costs more than a loan with a higher interest rate.

It’s also important to consider your loan term. A longer loan term gives you a lower monthly payment, but you’ll pay more interest. Each lender has different requirements and offers different terms, so shopping around can help you find the best loan available.

Apply for preapproval

mortgage preapproval gives you an idea of how much a lender is willing to lend you. It also shows the seller that you’re serious about buying and likely able to secure financing. Sellers and REALTORS® often require you to have preapproval before they’ll work with you, show you their home, or accept an offer.

Don’t confuse a prequalification with a preapproval, though. A prequalification is an estimate of what you can afford based on verbal information you provide.

Preapproval requires a credit pull and documentation of your qualifying factors. Rocket Mortgage® offers a Verified Approval Letter, which confirms the qualifying factors to determine how much home you can afford, so you can make offers with confidence.

The bottom line: A mortgage banker is a consultant you can trust

A mortgage banker originates and funds home loans. Your mortgage banker can walk you through the origination process and facilitate your loan closing. If you’re ready to see what you can afford and show sellers you’re a serious buyer, apply today for an approval with Rocket Mortgage.

Portrait photo of Rory Arnold.

Rory Arnold

Rory Arnold is a Los Angeles-based writer who has contributed to a variety of publications, including Quicken Loans, LowerMyBills, Ranker, Earth.com and JerseyDigs. He has also been quoted in The Atlantic. Rory received his Bachelor of Science in Media, Culture and Communication from New York University.