Mortgage Broker or Loan Officer

When you work on your application for a mortgage loan, you may work with a loan officer or you may choose to work with a mortgage broker. People sometimes confuse these as both will yield the same outcome: a new home. However, understanding the ways they differ is beneficial to the mortgage loan process.

What is a Mortgage Broker?

A mortgage broker (either a company or an individual) is an independent agent for the mortgage loan applicant as well as the lender. Your mortgage broker will stand as coordinator between you and the lending institution; which may be a credit union, bank, trust company, finance company, mortgage corporation or even a private investor. Which lender has the loans that fits your needs? A mortgage broker will help you find the best fit. From application to closing, your mortgage broker facilitates your loan process: offering your application to a number of lenders, and coordinating the process with the lender through to the closing of the loan. Upon closing, the broker's commission comes from the borrower.

Mortgage Bankers

The biggest difference between a mortgage broker and a loan officer is that a mortgage banker is employed by a lending institution (a bank, credit union, or others) to market and process loans only from that institution. There can be an assortment of loans types to choose from, but all are programs of that specific lending institution.

A mortgage banker (also known as an "account executive" or "loan representative") acts on behalf of the borrower to the lending institution. A mortgage banker will walk you through the application, processing and loan closing. Either a salary or commission is paid to mortgage brokers by their employers.