Mortgage Broker vs. Loan Officer

When it comes to locating a mortgage , you need to know the difference between a loan officer and a mortgage broker. Because both reap the same result (a new home), people frequently confuse the two. Yet it will be valuable to understand the ways they differ so you know what to expect from them during your mortgage application process.

What is a Mortgage Broker?

A mortgage broker (either a firm or an individual) is an independent agent for both the mortgage loan borrower and the lender. Your mortgage broker will stand as facilitator between you and the lending institution; which can be a bank, trust company, credit union, mortgage corporation, finance company or even an individual, private investor. You work with a mortgage broker to look at your financial situation and lead you to the lender who has the best loan program for you. From application to closing, your mortgage broker works with you: offering your mortgage application to a number of lenders, and coordinating the process with the lender through to the closing of your loan. The borrower submits a commission to the broker at closing.

Mortgage Bankers

Loan officers work for a particular lending institution (such as a bank, credit union, etc.) who promote and process mortgages and other lending programs originated by their company alone. They may be able to market loans to fit many different situations, but all the loans will be products from the same lender.

Also called a "loan representative" or "account executive," a loan officer represents the borrower to the lending institution. From selecting a loan to closing, a loan officer can guide you through the process. Either a salary or commission is paid to mortgage brokers by their employers.