Know the difference: Mortgage Brokers vs. Loan Officers

When it comes to getting a mortgage loan, you may work with a mortgage banker or you may choose to work with a mortgage broker. Since both a mortgage broker and lending officer can help you purchase your new home, it's common to confuse the two. However, it is helpful to recognize how they differ so you have clear expectations of them as you enter the mortgage process.

About Mortgage Brokers

During the mortgage loan process, an individual or company who is an independent agent for both mortgage loan borrower 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. Which lender offers the loan programs that is best for you? A mortgage broker will help you find the right fit. From application to closing, your mortgage broker facilitates your loan process: offering your mortgage application to several lenders, and walking you with the chosen lender through to the closing of the loan. The borrower pays a commission to the broker at closing.

About Loan Officers

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

A mortgage banker (also known as an "account executive" or "loan representative") acts on behalf of the borrower to the lender. From choosing a loan product to closing, a mortgage banker can guide you through the process. Either a salary or commission is paid to loan officers by their employers.