Know what to expect: Mortgage Brokers vs. Loan Officers

When you apply for a mortgage , you may work with a loan officer or you may choose to work with a mortgage broker. It's common to confuse these as both will produce the same outcome: a new home. However, it is valuable to understand the ways they differ so you have clear expectations of them as you enter your mortgage application process.

Mortgage Brokers

During the mortgage loan process, an individual or group who is an independent agent for both mortgage loan applicant and lender is a mortgage broker. Your mortgage broker will stand as coordinator between you and the lending institution; which can be a credit union, bank, trust company, finance company, mortgage corporation or even a private investor. A mortgage broker can look at your finances to determine which lender is the right fit for you. You deliver your mortgage loan application to your broker, who offers it to several lenders. Your mortgage broker then guides your work with the lender chosen until the loan closes. The borrower submits a commission to the broker upon closing.

Loan Officers

Lending Institutions (banks, finance companies, and others) employ loan officers to offer, and process loans originated by that particular institution alone. Although a mortgage banker may offer quite a range of loans, they all are programs of that lender alone.

Also called a "loan representative" or "account executive," a mortgage banker represents the borrower to the lender. The borrower is helped through the entire process, from selecting the loan to closing, by the mortgage banker. Lenders compensate their mortgage bankers with a commission or salary.

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