Know the difference: Mortgage Brokers and Loan Officers

Either a mortgage broker or a mortgage banker can work with you when it's time to find a mortgage loan. Since a new home is the result of the work of both mortgage broker and loan officer, it's understandable to confuse the two job types. Yet it is useful to understand the ways they differ so you know what to expect from them during your mortgage process.

What is a Mortgage Broker?

A mortgage broker is a person or firm that is an independent agent for the mortgage loan borrower as well as the lender. Your mortgage broker will stand as facilitator between you and the lending institution; which may be a credit union, bank, trust company, finance company, mortgage corporation or even an individual investor. Which lender has the loans that fits your needs? A mortgage broker will guide you to the right fit. Your broker will present your loan application to several lenders, and works with the lender of choice until closing. At closing, the broker's commission is paid by the borrower.

What is a Loan Officer?

The most important difference between a mortgage broker and a loan officer is that the latter works on behalf of a lending institution (a bank, credit union, or others) to promote and process loans only originated from the programs of that institution. While a loan officer may market quite a range of loans, they will be programs from that specific lender.

Your loan officer represents you to the bank or other lending institution. From finding a loan program to closing, a mortgage banker will help you through the process. Mortgage bankers can be given a commission or salary for their work by their employers.