Mortgage Broker and Mortgage Banker

When you apply for a mortgage loan, you should know the difference between a loan officer and a mortgage broker. Since both a mortgage broker and lending officer will help you fund your new home, people frequently confuse the two. However, recognizing how they differ will be advantageous to your mortgage process.

Mortgage Brokers

A mortgage broker (either a firm or an individual) is an independent agent for both the mortgage loan applicant and the lender. A mortgage broker coordinates things for you and your lender, which can be one of the following: a bank, trust company, credit union, mortgage corporation, finance company or even a private 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 partner with a mortgage broker to review your financial circumstance and lead you to the lender who has the best loan program for you. From application to closing, your mortgage broker works with you: presenting your mortgage application to a number of lenders, and walking you with the chosen lender through to closing. The broker gets a commission from the borrower if the loan closes.

Loan Officers

The main difference between a mortgage broker and a loan officer is that a loan officer works on behalf of a lending institution (a bank, credit union, or others) to process loans solely from the programs of that institution. They may be able to market loans to fit many different situations, but all the loans will be programs of the same lender.

Your loan officer will represent you to the bank or other lending institution. From choosing a loan program to closing, a mortgage banker will guide you through the process. Lenders compensate the loan officers with a salary or commission.