Know what to expect: Mortgage Brokers and Loan Officers

Either a mortgage broker or a mortgage banker may help you when you work on your application for a mortgage loan. Because both reap the same outcome (a new home), people usually confuse the two. But for the application process, it will benefit you if you understand how they differ.

Mortgage Brokers

A mortgage broker (either a firm or an individual) is an independent agent for both the mortgage loan applicant and the lender. A mortgage broker facilitates things for you and your lender, which can be one of the following: a bank, trust company, credit union, mortgage corporation, finance company or even an individual, private investor. Acting as a facilitator between you and your lender, your mortgage broker can match you with a credit union, bank, trust company, finance company, mortgage corporation or even an individual investor. A mortgage broker can look at your financial situation to determine which lender is the right fit for you. From application to closing, your mortgage broker works with you: presenting your application to several lenders, and walking you with the chosen lender through to closing. If the loan closes, the broker's commission comes from the borrower.

What is a Mortgage Banker?

Lending Institutions (banks, finance companies, and others) employ loan officers to offer, and process mortgage loans originated by that specific institution alone. Although a mortgage banker may promote quite a variety of loans, they all are programs from that specific lender.

A loan officer (also known as an "account executive" or "loan representative") represents the borrower to the lender. The borrower is walked through the entire process, from choosing a loan to closing, by the loan officer. Lending institutions compensate their loan officers with a commission or salary.