Know the difference: Mortgage Brokers and Loan Officers

When you're looking to get a mortgage loan, you may work with a loan officer or you may choose to work with a mortgage broker. Since a new home is the result of the work of both mortgage broker and loan officer, people frequently confuse the two. But for the application process, it will benefit you if you know how they differ.

What is a Mortgage Broker?

A mortgage broker (either a group or an individual) is an independent agent for both the mortgage loan applicant and the lender. Your mortgage broker will stand as coordinator between you and the lending institution; which may be a credit union, bank, trust company, finance company, mortgage corporation or even a private investor. You work with a mortgage broker to review your financial situation and lead you to the lender who has the best mortgage loan for you. Your broker will present your loan application to one or more lenders, and works with the chosen lender until the loan closes. At closing, the broker's commission comes from the borrower.

What is a Mortgage Banker?

Mortgage Bankers work for a specific lending institution (such as a bank, credit union, etc.) who offer and process mortgages and other loan products for their company alone. Although a loan officer may offer quite a variety of loan programs, they will be programs from that lender alone.

Also known as a "loan representative" or "account executive," a mortgage banker acts of behalf of the borrower to the lending institution. From finding a loan to closing, a loan officer will walk you through the process. Either a salary or commission is paid to loan officers by their employers.