Know the difference: Mortgage Brokers vs. Loan Officers

When you're looking to get a mortgage loan, you should know the difference between a mortgage broker and a loan officer. Because both a mortgage broker and mortgage banker will help you buy your new home, people can confuse the two. Yet knowing the ways they differ will be important to the mortgage process.

Mortgage Brokers

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 facilitator between you and the lending institution; which can be a bank, trust company, credit union, mortgage corporation, finance company or even an individual investor. You use a mortgage broker to consider your financial situation and find the lender who has the best loan program for you. From application to closing, your mortgage broker facilitates your loan process: submitting your mortgage application to several lenders, and coordinating the process with the lender through to closing. The borrower pays a commission to the broker if the loan closes.

About Loan Officers

Loan officers work for a specific lending institution (such as a bank) who offer and process mortgages and other loan programs from their company alone. Although a loan officer may promote quite a variety of loan programs, they all are programs with that lender alone.

A mortgage banker (also called an "account executive" or "loan representative") represents the borrower to the lending institution. The borrower is helped through the whole process, from finding a loan to closing, by the mortgage banker. Either a salary or commission is given to mortgage brokers by their employers.