Know what to expect: Mortgage Brokers and Loan Officers

When you apply for a mortgage , you may work with a loan officer or you may choose to work with a mortgage broker. Since both a mortgage broker and mortgage banker will help you fund your new home, it's easy to confuse them. But as you begin your application process, it will benefit you if you understand how they differ.

About Mortgage Brokers

A mortgage broker is an individual or group that is an independent agent for the mortgage loan applicant as well as the lender. Your mortgage broker will stand as facilitator between you and the lending institution; which may be a credit union, bank, trust company, finance company, mortgage corporation or even a private investor. You work with a mortgage broker to examine your financial circumstance and find the lender who has the right loan for you. Your broker will present your mortgage loan application to various lenders, and works with the chosen lender until closing. The broker is given a commission from the borrower when the loan closes.

Loan Officers

Loan officers work for a particular lending institution (such as a bank, credit union, etc.) who work with mortgages and other loan programs originated by their employer alone. There can be an assortment of loans types to draw from, but all are programs of that particular lending institution.

A loan officer (also called an "account executive" or "loan representative") represents the borrower to the lending institution. The borrower is guided through the entire process, from loan selection to closing, by the mortgage banker. Lending institutions give their mortgage bankers a commission or salary.