Mortgage Broker vs. Loan Officer

When you apply for a mortgage loan, you should know the difference between a mortgage banker and a mortgage broker. Because a new home is the result of the work of both mortgage broker and mortgage banker, people often confuse the two job types. However, knowing the differences between them is useful to your mortgage loan process.

Mortgage Brokers

A mortgage broker is a person or company that is an independent agent for the mortgage loan borrower as well as the lender. Your mortgage broker will stand as coordinator between you and the lending institution; which may be a credit union, bank, trust company, finance company, mortgage corporation or even an individual, private investor. A mortgage broker will consider your finances to find out which lender is the best fit for your loan needs. You deliver your mortgage loan application to your broker, who offers it to one or more lenders. Your mortgage broker then guides your work with the lender chosen until the closing of the loan. At closing, the broker's commission is given by the borrower.

What is a Loan Officer?

Mortgage Bankers represent a specific lending institution (such as a bank, credit union, etc.) who offer and process mortgages and other loan products on behalf of their place of employment alone. They may be able to promote loans to fit a variety of situations, but all the loans are products of the same lender.

A loan officer will represent you to the bank or other lending institution. The borrower is helped through the entire process, from choosing the loan to closing, by the loan officer. Mortgage bankers will be given a commission or salary for their work by their employers.