Mortgage Broker and Loan Officer

When you need a mortgage loan, you may work with a mortgage banker or you may choose to work with a mortgage broker. People usually confuse the two job types since both will produce the same result: a new home. But as you begin your application process, it can benefit you if you know how they are different.

What is a Mortgage Broker?

A mortgage broker is a person or firm that is an independent agent for the mortgage loan borrower as well as the lender. Your mortgage broker will stand as coordinator between you and the lending institution; which can be a credit union, bank, trust company, finance company, mortgage corporation or even an individual investor. You use a mortgage broker to consider your financial circumstance and find the lender who has the right mortgage loan for you. You give your mortgage loan application to your broker, who submits it to a number of lenders. Your mortgage broker then assists your work with the lender chosen until the loan closes. The broker receives a commission from the borrower upon closing.

Loan Officers

The biggest difference between a mortgage broker and a loan officer is that the latter works on behalf of a lending institution (a bank, credit union, or others) to market and process loans solely originated from the programs of that institution. There can be a wide range of loans types to choose from, but all are programs of that specific lending institution.

A mortgage banker (also known as an "account executive" or "loan representative") represents the borrower to the lender. The borrower is walked through the entire process, from loan selection to closing, by the loan officer. Lenders compensate the mortgage bankers with a salary or commission.