Mortgage Broker or Loan Officer

When you're looking to get a mortgage loan, you should know the difference between a mortgage broker and a loan officer. As a new home is the outcome of the work of both mortgage broker and mortgage banker, it's understandable to confuse the two. Yet understanding the ways they differ is important to the mortgage loan process.

What is a Mortgage Broker?

A mortgage broker is someone or group that is an independent agent for the mortgage loan borrower as well as the lender. Your mortgage broker will stand as facilitator between you and the lending institution; which can be a bank, trust company, credit union, mortgage corporation, finance company or even a private investor. Which lender offers the mortgage loans that fits your financial situation? A mortgage broker will help you find the best one. From application to closing, your mortgage broker works with you: presenting your application to several lenders, and coordinating the process with the lender through to closing. The broker is given 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 is employed by a lending institution (a bank, credit union, or others) to process loans only from that institution. Although a mortgage banker may offer quite a range of loans, they all are products with that lender alone.

Also called a "loan representative" or "account executive," a loan officer acts of behalf of the borrower to the lender. The borrower is walked through the whole process, from selecting the loan to closing, by the mortgage banker. Mortgage bankers are given a commission or salary for their services by their employers.