Know the difference: Mortgage Brokers and Loan Officers

When you need a mortgage loan, you need to know the difference between a mortgage broker and a mortgage banker. Since a new home is the result of the work of both mortgage broker and mortgage banker, it's common to confuse the two job types. Yet it will be helpful to recognize how they differ so you know what to expect from them during the mortgage process.

About Mortgage Brokers

A mortgage broker is a person or company that works as an independent agent for the mortgage loan borrower as well as the lender. Your mortgage broker will stand as facilitator between you and the lending institution; which may be a bank, trust company, credit union, mortgage corporation, finance company or even a private investor. You work with a mortgage broker to analyze 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 a number of lenders, and walking you with the chosen lender through to closing. At closing, the broker's commission is given by the borrower.

What is a Mortgage Banker?

Loan officers are representatives of a particular lending institution (such as a bank) who market and process mortgages and other loan programs for their place of employment alone. They may be able to market loans to fit a variety of 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 lender. From choosing a loan product to closing, a loan officer can guide you through the process. Loan officers are paid a commission or salary for their work by their employers.