Know what to expect: Mortgage Brokers and Loan Officers

When you're looking to get a mortgage loan, you need to know the difference between a mortgage broker and a loan officer. Because a new home is the result of the work of both mortgage broker and loan officer, it's understandable to confuse them. Yet understanding the ways they differ will be helpful to your mortgage loan process.

About Mortgage Brokers

A mortgage broker (either a company or an individual) is an independent agent for the mortgage loan borrower as well as the lender. A mortgage broker facilitates things between 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 investor. Acting as a facilitator between you and your lender, your mortgage broker can match you with a bank, trust company, credit union, mortgage corporation, finance company or even an individual investor. You work with a mortgage broker to look at your financial situation and find the lender who has the right mortgage loan for you. From application to closing, your mortgage broker facilitates your loan process: submitting your application to several lenders, and walking you with the chosen lender through to closing. If the loan closes, the broker's commission is paid by the borrower.

What is a Mortgage Banker?

Lending Institutions (banks, finance companies, and others) employ loan officers to market, and process loans solely on behalf of that specific institution. They may be able to offer loans to fit a variety of situations, but all the loans will be programs from the same lender.

Also called a "loan representative" or "account executive," a loan officer represents the borrower to the lender. From selecting a loan program to closing, a loan officer can help you through the process. Either a salary or commission is given to mortgage brokers by their employers.

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