Mortgage Broker vs. Loan Officer

When you apply for a mortgage loan, you may work with a mortgage banker or you may choose to work with a mortgage broker. Because both a mortgage broker and lending officer can help you buy your new home, people frequently confuse them. However, it is important to recognize how they differ so you have clear expectations of them during your mortgage application process.

About Mortgage Brokers

During the mortgage loan process, an individual or firm who is an independent agent for both mortgage loan applicant and lender is a mortgage broker. Your mortgage broker will stand as coordinator between you and the lending institution; which may be 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 find out which lender is the right fit for your loan needs. From application to closing, your mortgage broker works with you: offering your loan application to a number of lenders, and coordinating the process with the lender through to closing. Upon closing, the broker's commission is given by the borrower.

What is a Loan Officer?

The most important difference between a mortgage broker and a loan officer is that the latter is employed by a lending institution (a bank, credit union, or others) to promote and process loans solely from that institution. They may be able to market loans to fit many different situations, but all the loans are products from the same lender.

Also called a "loan representative" or "account executive," a mortgage banker represents the borrower to the lending institution. A loan officer will walk you through the selection, processing and loan closing. Lending institutions pay their loan officers a commission or salary.