Mortgage Broker vs. Loan Officer

Either a mortgage broker or a loan officer can assist you when you work on your application for a mortgage loan. Because both produce the same outcome (a new home), people sometimes confuse them. Yet understanding the ways they differ is important to your mortgage loan process.

About Mortgage Brokers

During the mortgage loan process, an individual or group who is an independent agent for the mortgage loan applicant as well as the lender is a mortgage broker. Your mortgage broker will stand as coordinator between you and the lending institution; which may be a bank, trust company, credit union, mortgage corporation, finance company or even a private investor. Which lender offers the loans that fits your needs? A mortgage broker will help you find the best fit. From application to closing, your mortgage broker facilitates your loan process: submitting your mortgage application to several lenders, and walking you with the chosen lender through to closing. When the loan closes, the broker's commission is paid by the borrower.

About Mortgage Bankers

The most important difference between a mortgage broker and a mortgage banker is that the latter works on behalf of a lending institution (a bank, credit union, or others) to process loans only originated from that institution. While a mortgage banker may promote quite a range of loan programs, they all are products of that particular lender.

A loan officer (also called an "account executive" or "loan representative") represents the borrower to the lender. The borrower is helped through the entire process, from loan selection to closing, by the mortgage banker. Either a salary or commission is given to loan officers by their employers.