What Is a Mortgage Banker?
Mortgage bankers are professionals who try to get mortgages for people who wish to do business with their bank. Many people assume that all mortgage lenders are alike, but that is not the case. There are mortgage bankers and mortgage brokers. Someone looking for a mortgage should realize that each of these options has advantages and drawbacks.
To begin with, mortgage bankers can work for much less money than a broker can. Brokers are middlemen who earn their money on fees that they charge for their services. Mortgage banks don't need to earn nearly as much money from fees because, for one thing, they don't have to spend nearly as much time analyzing an application for a loan to see if they can and will underwrite it. They also sometimes retain the mortgage loan and service it so that they earn the money from the interest paid on it since they themselves are the lender; and, when they do sell mortgages, they get paid very well for them since it's their money on the line. Mortgage bankers are also far quicker than mortgage brokers to respond to applications, meaning that consumers don't have to spend a lot of time waiting to see if they are approved and what kind of loan they can get.
That said, mortgage bankers don't have access to all of the myriad programs that brokers do; the bankers must work with the relatively short list of their bank's mortgage programs, and that's it. If they reject a loan applicant once, that's pretty much it, whereas a broker can shop an applicant around to different lenders with different programs. So, mortgage bankers need to be thorough in attracting and helping as many qualified loan applicants as they can, so that they make as much money for their bank and themselves as they possibly can.
Mortgage Banker Details and Positions
Mortgage bankers are generally loan officers, except that they work exclusively for their bank and not as loan brokers. More experienced mortgage bankers may become managers in the mortgage department of their bank. In smaller banks, mortgage bankers may also wear other hats that allow them to sell securities, savings accounts, or other types of loan vehicles to the bank's clientele.
Mortgage bankers need to be familiar with state-of-the-art technologies for conducting credit, underwriting, and financial analyses so that they can attempt to qualify a prospective borrower for the various loan programs that the bank offers. They need to be able to evaluate various mortgage programs to find affordable financing options from the range of programs that the bank offers. Thus, they should also be computer savvy. They also need to be good educators and advisors who can guide clients with respect to the home buying process and how to better manage their mortgages. Mortgage bankers also need to be able to give assistance to loan-seeking clients throughout the loan process, from application and opening to closing, troubleshooting any transaction issues that may arise.
Typically, mortgage bankers don't need to have cold calling telephone skills. Banks tend to get their loan prospects from walk-ins or call-ins and people who are doing business with them in other areas already. As such, mortgage bankers don't need to be as "salesy" as brokers; they are more valued for their knowledge than they are for their salesmanship abilities. That said, they do need excellent communications skills, and they need to have a persuasive way with people.
A mortgage banker should be prepared to work a little more than the typical 40-hour-a-week job holder and perhaps work some Saturdays.
The Money
The average annual pay for a mortgage banker is $61,000; however, salaries vary greatly across the industry due to differences in bank sizes and complexity, locations, the specialization of the given bank or mortgage banker, the given banker's experience, and varying compensation structures. Mortgage banker managers typically earn override commissions off of the sales made by their staff. Some banks pay higher or lower base salaries, and some emphasize salaries over commissions, while others give greater or lesser bonus incentives.
Background
Mortgage bankers don't need any special education if they bring the requisite related experiences to the table. They can be trained and licensed by the bank for low cost if they have proven themselves to have the right personality and experience. That said, recent college graduates who are interested in becoming mortgage bankers should have degrees in business, accounting, economics, or finance.
Conclusion
Mortgage bankers can earn very good money working in a comfortable office environment without needing to do a lot of selling. They simply need to be friendly, helpful, and interested in personal financial analyses.
