Know the difference: Mortgage Brokers vs. Loan Officers

When it's time to find a mortgage , you may work with a loan officer or you may choose to work with a mortgage broker. As both yield the same outcome (a new home), people often confuse them. However, recognizing how they are different will be valuable to your mortgage process.

About Mortgage Brokers

During the mortgage loan process, an individual or group who is an independent agent for the mortgage loan applicant as well as the lender is a mortgage broker. 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. A mortgage broker can look at your numbers to determine which lender is the best fit for your loan needs. Your broker will submit your loan application to several lenders, and works with the lender of choice until closing. The broker receives a commission from the borrower upon closing.

Loan Officers

The most important difference between a mortgage broker and a mortgage banker is that a loan officer works on behalf of a lending institution (a bank, credit union, or others) to process loans only originated from the products of that institution. There may be a wide range of loans types to draw from, but all are programs of that particular lender.

A mortgage banker represents you to the bank or other lending institution. The loan officer will help you through the selection, processing and loan closing. Lending institutions give their mortgage bankers a commission or salary.