Mortgage Broker vs. Loan Officer

Either a mortgage broker or a mortgage banker may assist you when you work on your application for a mortgage loan. As a new home is the result of the work of both mortgage broker and loan officer, it's easy to confuse the two. But for the application process, it will help if you know how they differ.

What is a Mortgage Broker?

A mortgage broker is a person or company that serves as an independent agent for both the mortgage loan applicant and the lender. A mortgage broker coordinates things between you and your lender, which can be one of the following: a bank, trust company, credit union, mortgage corporation, finance company or even a private investor. Acting as a facilitator between you and your lender, your mortgage broker can match you with a bank, trust company, credit union, mortgage corporation, finance company or even a private investor. You use a mortgage broker to look at your financial situation and lead you to the lender who has the right loan program for you. You give your loan application to your broker, who presents it to several lenders. Your mortgage broker then helps you work with the lender chosen until the closing of the loan. The broker is given a commission from the borrower when the loan closes.

What is a Mortgage Banker?

The most important difference between a mortgage broker and a loan officer is that a mortgage banker works on behalf of a lending institution (a bank, credit union, or others) to market and process loans solely originated from that institution. There can be an assortment of loans types to choose from, but all are programs of that particular lender.

Also called a "loan representative" or "account executive," a mortgage banker acts of behalf of the borrower to the lending institution. The loan officer will walk the borrower through the selection, processing and closing of the loan. Either a salary or commission is given to loan officers by their employers.