Who Has Your Back? The Fiduciary Responsibility of Mortgage Brokers vs. Lenders

When you’re getting a mortgage, you have two main options for who to work with: a mortgage broker or a mortgage lender (loan officer at a bank or mortgage company). While both help borrowers secure home financing, there’s a key difference in who they ultimately work for—and that can impact your loan options.

At the core of this difference is fiduciary responsibility—a term that simply means, “Who is this person legally required to put first?”

Mortgage Brokers: Working for You

A mortgage broker is like a personal shopper for your mortgage. They work with multiple lenders, comparing loan options to find the best fit for your situation.

And here’s what sets them apart: A mortgage broker has a fiduciary duty to the borrower. This means they are legally and ethically required to act in your best interest—even if it means recommending a loan that pays them less in commission. Their success is tied to helping clients find the best possible loan, not just closing deals.

How a Mortgage Broker Puts You First:

More loan options – Brokers can shop multiple lenders to find the most competitive rates and terms.

Transparency – They must disclose fees, lender compensation, and any potential conflicts of interest.

Customized solutions – A broker can help borrowers with unique financial situations, like self-employed buyers or those with credit challenges.

Competitive pricing – Because they’re not tied to one lender, they can negotiate better rates and deals on your behalf.

Mortgage Lenders: Working for the Bank

A mortgage lender (loan officer) works directly for a bank, credit union, or mortgage company. Their job is to help borrowers secure financing within their company’s loan programs.

Unlike brokers, lenders do not have a fiduciary duty to the borrower—instead, they have an obligation to their employer. That doesn’t mean they don’t want to help you (many lenders are great at what they do), but they are limited to offering only their company’s loan products.

How a Mortgage Lender Serves Their Company:

Limited loan options – They can only offer products from their institution, even if better options exist elsewhere.

Profit-driven recommendations – Some lenders prioritize loan products that align with their company’s business model.

Set interest rates – Rates and fees are determined by the bank or lender, which may not always be the most competitive.

So, Which One Should You Work With?

Both mortgage brokers and direct lenders can provide great service, but the key difference comes down to who they are accountable to:

• If you want someone legally required to act in your best interest and shop multiple loan options for you, a mortgage broker is the better choice.

• If you have a strong relationship with a specific bank and prefer to keep everything in-house, working with a direct lender might be the right fit.

No matter which route you choose, shopping around is always a good idea. A mortgage is a major financial decision, and having an advocate who’s looking out for you makes all the difference.

Have Questions? Let’s Talk!

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I’m here to help you make smart, informed decisions about your home loan. Let’s find the best option for you!