Mortgage Broker and Loan Officer

When you need a mortgage loan, you may work with a mortgage banker or you may choose to work with a mortgage broker. As a new home is the outcome of the work of both mortgage broker and mortgage banker, it's easy to confuse the two. Yet knowing the ways they differ will be helpful to your mortgage loan process.

What is a Mortgage Broker?

A mortgage broker is someone or company that acts as an independent agent for both the mortgage loan borrower and 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 you. From application to closing, your mortgage broker facilitates your loan process: offering your application to several lenders, and walking you with the chosen lender through to closing. The borrower gives a commission to the broker upon closing.

What is a Mortgage Banker?

The most important 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 process loans solely originated from that institution. There can be an assortment of loans types to choose from, but all are products of that specific lending institution.

A loan officer represents you to the bank or other lending institution. The borrower is guided through the entire process, from loan selection to closing, by the loan officer. Either a salary or commission is given to loan officers by their employers.