Mortgage Broker
A mortgage broker acts as an intermediary between borrowers and wholesale lenders. Brokers do not fund loans themselves but instead place the loan with a third-party lender.
Mortgage brokers may offer access to multiple wholesale lenders, but underwriting and funding are handled by the selected lender rather than the brokerage. Compare this to a mortgage banker, who funds in their own name.
Broker compensation must be disclosed and can be structured as borrower-paid or lender-paid. A good broker will show you both options and explain how each affects your rate and closing costs. Federal law prohibits charging you on both sides of the same loan.
Why This Matters: Understanding the broker model helps you compare loan options with full transparency. A broker can offer access to multiple lenders — but the funding and underwriting happen elsewhere.
Common question
What does a mortgage broker do?
A broker works between you and wholesale lenders. They help you find a loan and handle the application, but the lender they choose does the underwriting and funding.
Do I pay the broker or the lender?
Broker compensation can be paid by the lender (built into the rate) or by you (as a fee at closing). It must be disclosed; you cannot be charged by both on the same loan.
Related Topics
Related Mortgage Terms
Considering working with a broker? We can explain how the model works and what to look for.
Want this applied to your situation?
Understanding a term is one thing. Knowing how it affects your loan, your rate, or your closing costs is another. Kara can walk you through exactly how this applies to your file — in plain language, in 30 minutes.
See How This Applies to YouNo obligation. In person, by phone, or on Zoom.
Ready to Take the Next Step?
Clear answers. No pressure. Just a solid plan built around you.
30 minutes. In person, by phone, or on Zoom. No obligation.