Mortgage Broker vs. Loan Officer

When you need a mortgage , you should know the difference between a mortgage broker and a loan officer. Because both a mortgage broker and mortgage banker will help you purchase your new home, it's easy to confuse the two. However, it is helpful to recognize the ways they differ so you know what to expect from them during your mortgage application process.

About Mortgage Brokers

A mortgage broker is an individual or firm that serves as an independent agent for both the mortgage loan applicant and the lender. A mortgage broker coordinates things between 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 credit union, bank, trust company, finance company, mortgage corporation or even a private investor. A mortgage broker can examine your financial situation to find out which lender is the best fit for your loan needs. You deliver your loan application to your broker, who offers it to a number of lenders. Your mortgage broker then assists your work with the lender of choice until closing. The broker is given a commission from the borrower if the loan closes.

What is a Mortgage Banker?

Lending Institutions (banks, finance companies, and others) employ mortgage bankers to promote, and process mortgage loans solely originated by that specific institution. They may have the ability to offer loans to fit many different situations, but all the loans will be programs from the same lender.

Also called a "loan representative" or "account executive," a loan officer acts of behalf of the borrower to the lending institution. A loan officer will guide the borrower through the selection, processing and closing of the loan. Either a salary or commission is given to mortgage brokers by their employers.