Mortgage Broker and Loan Officer

When you work on your application for a mortgage loan, you may work with a loan officer or you may choose to work with a mortgage broker. Since both produce the same outcome (a new home), it's easy to confuse the two. But as you begin your application process, it can help if you know 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. 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. You partner with a mortgage broker to analyze your financial circumstance and find the lender who has the best loan for you. From application to closing, your mortgage broker facilitates your loan process: offering your application to several lenders, and walking you with the chosen lender through to closing. At closing, the broker's commission comes from the borrower.

What is a Mortgage Banker?

The biggest difference between a mortgage broker and a loan officer is that the latter works on behalf of a lending institution (a bank, credit union, or others) to process loans solely originated from that institution. While a loan officer may market quite a variety of loan programs, they all are programs from that lender alone.

A loan officer (also called an "account executive" or "loan representative") represents the borrower to the lender. The borrower is helped through the whole process, from loan selection to closing, by the loan officer. Loan officers will be compensated with a commission or salary for their work by their employers.

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