Know what to expect: Mortgage Brokers vs. Loan Officers

When you need a mortgage loan, you should know the difference between a loan officer and a mortgage broker. As both produce the same result (a new home), it's easy to confuse the two job types. However, it will be beneficial to understand how they differ so you know what to expect from them as you enter the mortgage application process.

About Mortgage Brokers

A mortgage broker (either a firm or an individual) is an independent agent for the mortgage loan borrower as well as the lender. A mortgage broker facilitates things between 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 credit union, bank, trust company, finance company, mortgage corporation or even an individual investor. A mortgage broker can look at your financial situation to find out which lender is the best fit for your loan needs. Your broker will submit your loan application to several lenders, and works with the chosen lender until closing. Upon closing, the broker's commission is given by the borrower.

About Mortgage Bankers

The most important difference between a mortgage broker and a mortgage banker is that a loan officer is employed by a lending institution (a bank, credit union, or others) to process loans only originated from the programs of that institution. They may have the ability to promote loans to fit a variety of situations, but all the loans will be products from the same lender.

A mortgage banker represents you to the bank or other lending institution. The loan officer can guide the borrower through the application, processing and closing of the loan. Lenders pay their loan officers a salary or commission.