Know what to expect: Mortgage Brokers and Loan Officers

Either a mortgage broker or a loan officer may help you when you apply for a mortgage loan. As both a mortgage broker and lending officer can help you buy a new home, people can confuse the two. However, understanding the ways they differ will be helpful to the mortgage process.

What is a Mortgage Broker?

A mortgage broker is someone or firm that serves as an independent agent for the mortgage loan borrower as well as the lender. Your mortgage broker will stand as facilitator between you and the lending institution; which may be a bank, trust company, credit union, mortgage corporation, finance company or even an individual investor. You use a mortgage broker to analyze your financial circumstance and find the lender who has the best loan for you. You deliver your loan application to your broker, who presents it to a number of lenders. Your mortgage broker then helps you work with the lender chosen until closing. At closing, the broker's commission is given by the borrower.

Loan Officers

Loan officers represent a specific lending institution (such as a bank, credit union, etc.) who work with mortgages and other loan programs from their place of employment alone. They may have the ability to market loans to fit a variety of situations, but all the loans will be programs of the same lender.

Also known as a "loan representative" or "account executive," a mortgage banker represents the borrower to the lending institution. From selecting a loan program to closing, a mortgage banker can walk a borrower through the process. Lending institutions compensate the loan officers with a salary or commission.