Mortgage Broker vs. Loan Officer

Either a mortgage broker or a loan officer may work with you when you need a mortgage . Since both a mortgage broker and lending officer will help you fund your new home, people usually confuse the two. Yet it is valuable to recognize the difference between them so you have clear expectations of them as you enter the mortgage application process.

Mortgage Brokers

A mortgage broker is someone or company that is an independent agent for both the mortgage loan borrower 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 examine your financial situation and lead you to the lender who has the best loan program for you. Your broker will offer your mortgage loan application to a handful of lenders, and works with the chosen lender until the loan closes. The borrower submits a commission to the broker at closing.

What is a Loan Officer?

The most important difference between a mortgage broker and a loan officer is that the latter works for a lending institution (a bank, credit union, or others) to process loans solely from the programs of that institution. They may have the ability to promote loans to fit many different situations, but all the loans are products from the same lender.

Also called a "loan representative" or "account executive," a mortgage banker represents the borrower to the lending institution. From choosing a loan to closing, a mortgage banker will help you through the process. Mortgage bankers can be given a commission or salary for their services by their employers.

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