Know the difference: Mortgage Brokers and Loan Officers

Either a mortgage broker or a mortgage banker may work with you when it comes to locating a mortgage loan. It's common to confuse the two because both will yield the same outcome: a new home. However, knowing the differences between them is useful to your mortgage process.

About Mortgage Brokers

During the mortgage loan process, an individual or company who is an independent agent for both mortgage loan borrower and lender is a mortgage broker. A mortgage broker facilitates 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, private 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 an individual investor. Which lender offers the loans that fits your needs? A mortgage broker will lead you to the right fit. From application to closing, your mortgage broker facilitates your loan process: submitting your loan application to a number of lenders, and coordinating the process with the lender through to closing. The borrower gives a commission to the broker when the loan closes.

What is a Loan Officer?

The main difference between a mortgage broker and a mortgage banker is that a mortgage banker works on behalf of a lending institution (a bank, credit union, or others) to market and process loans only originated from the programs of that institution. While a mortgage banker may offer quite a range of loan programs, they will be products of that lender alone.

A loan officer (also called an "account executive" or "loan representative") represents the borrower to the lender. A mortgage banker can help you through the application, processing and loan closing. Either a salary or commission is given to loan officers by their employers.