Mortgage Broker vs. Loan Officer

When you work on your application for a mortgage loan, you need to know the difference between a mortgage broker and a loan officer. As a new home is the outcome of the work of both mortgage broker and mortgage banker, it's understandable to confuse the two job types. However, it will be valuable to understand the ways they differ so you have clear expectations of them as you enter the mortgage application process.

Mortgage Brokers

A mortgage broker is someone or firm that acts as an independent agent for both the mortgage loan borrower and the lender. A mortgage broker coordinates things between you and your lender, which can be one of the following: a bank, trust company, credit union, mortgage corporation, finance company or even an individual investor. Acting as a facilitator between you and your lender, your mortgage broker can match you with a credit union, bank, trust company, finance company, mortgage corporation or even an individual, private investor. You use a mortgage broker to examine your financial circumstance and lead you to the lender who has the right loan program for you. From application to closing, your mortgage broker facilitates your loan process: presenting your application to several lenders, and walking you with the chosen lender through to the closing of the loan. If the loan closes, the broker's commission is paid by the borrower.

About Loan Officers

The biggest difference between a mortgage broker and a loan officer is that the latter is employed by a lending institution (a bank, credit union, or others) to offer and process loans solely originated from that institution. There may be a variety of loans types to choose from although all are products of that specific lending institution.

Your mortgage banker represents you to the bank or other lending institution. From selecting a loan program to closing, a mortgage banker will walk a borrower through the process. Either a salary or commission is paid to loan officers by their employers.

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