Know the difference: Mortgage Brokers and Loan Officers

When it comes to locating a mortgage loan, you may work with a mortgage banker or you may choose to work with a mortgage broker. It's understandable to confuse the two as both will yield the same result: a new home. However, knowing the differences between them will be helpful to your mortgage process.

Mortgage Brokers

A mortgage broker (either a group 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, private investor. Which lender has the loans that fits your financial situation? A mortgage broker will lead you to the best fit. You give your mortgage loan application to your broker, who presents it to various lenders. Your mortgage broker then assists your work with the lender chosen until the loan closes. Upon closing, the broker's commission comes from the borrower.

What is a Mortgage Banker?

Lending Institutions (banks, finance companies, and others) employ mortgage bankers to promote, and process mortgage loans solely on behalf of that particular institution. There may be a wide variety of loans types to draw from even though all are programs of that specific lender.

Also called a "loan representative" or "account executive," a loan officer acts of behalf of the borrower to the lending institution. The borrower is guided through the entire process, from selecting a loan to closing, by the loan officer. Lending institutions compensate the mortgage bankers with a salary or commission.