Know what to expect: Mortgage Brokers and Loan Officers

When it's time to apply for a mortgage , you need to know the difference between a loan officer and a mortgage broker. Because both a mortgage broker and lending officer will help you fund a new home, people sometimes confuse them. But as you begin the application process, it can benefit you if you recognize they ways they differ.

About Mortgage Brokers

During the mortgage loan process, an individual or group who is an independent agent for both mortgage loan applicant and lender is a mortgage broker. Your mortgage broker will stand as coordinator between you and the lending institution; which can be a bank, trust company, credit union, mortgage corporation, finance company or even a private investor. A mortgage broker can consider your numbers to determine which lender is the right fit for your loan needs. Your broker will offer your loan application to one or more lenders, and works with the lender of choice until closing. The borrower gives a commission to the broker when the loan closes.

What is a Loan Officer?

The biggest difference between a mortgage broker and a mortgage banker is that the latter works on behalf of a lending institution (a bank, credit union, or others) to process loans solely originated from that institution. Although a mortgage banker may promote quite a range of loans, they all are programs with that specific lender.

Also called a "loan representative" or "account executive," a mortgage banker acts of behalf of the borrower to the lender. The borrower is walked through the entire process, from loan selection to closing, by the mortgage banker. Either a salary or commission is given to loan officers by their employers.