Mortgage Broker vs. Loan Officer

When you work on your application for a mortgage , you may work with a loan officer or you may choose to work with a mortgage broker. Because both give the same outcome (a new home), it's understandable to confuse the two. Yet it will be valuable to understand how they differ so you have clear expectations of them as you enter the mortgage application process.

What is a Mortgage Broker?

A mortgage broker is someone or group that serves as an independent agent for the mortgage loan applicant as well as the lender. A mortgage broker coordinates things for you and your lender, which can be one of the following: a credit union, bank, trust company, finance company, mortgage corporation or even an individual 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 an individual, private investor. A mortgage broker can look at your financial situation to determine which lender is the right fit for you. You give your loan application to your broker, who submits it to various lenders. Your mortgage broker then helps you work with the lender chosen until the loan closes. At closing, the broker's commission is given by the borrower.

What is a Mortgage Banker?

Lending Institutions (banks, finance companies, and others) employ loan officers to promote, and process mortgage loans on behalf of that specific institution alone. There can be a variety of loans types to draw from even though all are programs of that specific lending institution.

A mortgage banker (also known as an "account executive" or "loan representative") acts on behalf of the borrower to the lending institution. A loan officer can walk you through the application, processing and closing of the loan. Either a salary or commission is given to mortgage brokers by their employers.

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