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Short answer
A bank or other direct lender makes your loan with its own money and offers its own programs and pricing, while a mortgage broker does not lend money and instead shops your application to multiple lenders. Both are regulated: federal rules limit how loan officers are paid, ban steering you to a worse loan to raise their pay, and require every loan originator to be registered or licensed. Neither is automatically less expensive, so compare Loan Estimates for the same loan.
| Topic | Mortgage broker | Bank or direct lender |
|---|---|---|
| Whose money funds the loan | A wholesale lender's; the broker does not lend | The bank's or lender's own |
| Loan options | Programs from multiple lenders | That institution's programs |
| Who underwrites | The lender you choose | The bank or lender |
| How the loan officer is paid | By you or by the lender, not both; cannot vary with loan terms | Usually by the lender; cannot vary with loan terms |
| Licensing | State licensed through NMLS | Bank loan officers are federally registered through NMLS |
| Disclosures you get | Loan Estimate and Closing Disclosure | Loan Estimate and Closing Disclosure |
| Typical fit | Shoppers who want several lenders compared at once | Existing customers or borrowers who want one institution |
The CFPB describes a lender as a financial institution that makes loans directly to you. Banks, credit unions, and nonbank mortgage companies are all lenders. When you apply with a lender's loan officer, you are applying for that lender's products. Lenders underwrite and fund the loan, and they may keep servicing it or sell it.
Working directly with a lender can make sense when you already bank there, when it offers a program you want, or when you like keeping everything with one institution. Some banks also offer relationship benefits for existing customers; ask what applies to you.
A mortgage broker is a licensed professional who connects borrowers with lenders. The CFPB notes that brokers do not lend money and that they typically work with multiple lenders, while a lender's loan officer often works for one. Some companies act as both lender and broker, depending on the loan.
A broker usually works with wholesale lenders: lenders that fund loans brought to them by brokers. The lender still underwrites, approves, and funds the loan, and your loan may be serviced by that lender or a company it chooses.
Pick My Mortgage Rate is an independent mortgage broker powered by Loan Factory. Instead of offering one bank's pricing, we compare your loan across 220+ wholesale lenders so you can see your options side by side and choose.
This is where most of the confusion lives, so here are the federal rules.
According to the CFPB, a loan officer or broker is paid through a fee or commission that can come from you or from the lender. If you pay the broker directly, the broker cannot also be paid by the lender on that loan. That ban on "dual compensation" is in Regulation Z, section 1026.36(d)(2). Either way, the cost shows up on your Loan Estimate and Closing Disclosure.
Federal law prohibits paying loan originators more based on your loan's terms, such as a higher interest rate. That rule applies to bank loan officers and to brokers. It is meant to remove the incentive to put you in a pricier loan.
Regulation Z also prohibits steering you into a loan to increase the originator's pay unless the loan is in your interest. A broker can meet that standard by presenting loan options from a significant number of the lenders it works with, including the option with the lowest interest rate, the option with the lowest total points and origination fees, and the option with the lowest rate without certain risky features, for each type of loan you are interested in. You are free to pick any of them.
Every mortgage loan originator has to be either registered or licensed, and you can look them up.
The CFPB recommends checking any company or loan officer on NMLS Consumer Access before you apply. Jerry Kindig is personally licensed in 19 states; you can verify his license with his individual NMLS #2397823 and Loan Factory's company NMLS #320841.
These questions help whether you talk to a bank, a broker, or both:
We are an independent mortgage broker powered by Loan Factory. Instead of offering one bank's pricing, we compare your loan across 220+ wholesale lenders so you can see your options side by side and choose. Jerry Kindig is personally licensed in 19 states.
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Not automatically. Costs depend on the lender, your loan, and the market on the day you lock. The only way to know is to compare Loan Estimates for the same loan from more than one source.
No. A broker takes your application and shops it to lenders. The lender you choose underwrites, approves, and funds the loan.
Through a fee or commission paid either by you or by the lender, not both on the same loan. Federal rules prohibit their pay from depending on your loan's terms, such as the interest rate.
Yes. Brokers must be state licensed through NMLS, which requires pre-licensing education, a written test, and background checks. They also follow the federal Regulation Z rules on pay and steering.
Yes. Many borrowers get a Loan Estimate from their own bank and one from a broker, then compare. You can choose either.
Search their name or NMLS ID on NMLS Consumer Access. It shows whether the person and company are registered or licensed and where.
This page is general education, not a loan offer, commitment, or approval. Program rules and figures change; the figures here were checked against the sources below in October 2026. Your options depend on your credit, income, property, and each lender's guidelines. All loans are subject to approval.
Pick My Mortgage Rate powered by Loan Factory | Jerry Kindig, Individual NMLS #2397823 | Loan Factory, Company NMLS #320841 | Equal Housing Opportunity
This page explains the rules. For your situation, compare options yourself or talk with a licensed loan officer.