Mortgage Broker or Loan Officer

When it's time to locate a mortgage , you need to know the difference between a loan officer and a mortgage broker. Because both a mortgage broker and mortgage banker will help you buy a new home, it's easy to confuse them. Yet it will be valuable to recognize the ways they differ so you have clear expectations of them as you enter the mortgage process.

What is a Mortgage Broker?

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 facilitator between you and the lending institution; which can be a credit union, bank, trust company, finance company, mortgage corporation or even an individual investor. You work with a mortgage broker to review your financial circumstance and find the lender who has the right mortgage loan for you. Your broker will offer your loan application to several lenders, and works with the lender of choice until the loan closes. The borrower gives a commission to the broker at closing.

Loan Officers

The biggest difference between a mortgage broker and a loan officer is that the latter works for a lending institution (a bank, credit union, or others) to process loans solely from the programs of that institution. They may be able to offer loans to fit a variety of situations, but all the loans will be products from the same lender.

A loan officer represents you to the bank or other lending institution. From choosing a loan program to closing, a loan officer will help you through the process. Lenders pay their mortgage bankers a commission or salary.