Know the difference: Mortgage Brokers and Loan Officers

When it comes to locating a mortgage , you may work with a mortgage banker or you may choose to work with a mortgage broker. Because both reap the same result (a new home), people often confuse the two. Yet it will be valuable to recognize the ways they differ so you know what to expect from them during the mortgage process.

Mortgage Brokers

During the mortgage loan process, an individual or firm who is an independent agent for both mortgage loan borrower and lender is a mortgage broker. 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 an individual investor. Acting as a facilitator between you and your lender, your mortgage broker can match you with a bank, trust company, credit union, mortgage corporation, finance company or even an individual, private investor. A mortgage broker can analyze your finances to determine which lender is the best fit for your loan needs. From application to closing, your mortgage broker facilitates your loan process: submitting your loan application to a number of lenders, and walking you with the chosen lender through to closing. The broker receives a commission from the borrower upon closing.

Mortgage Bankers

The main difference between a mortgage broker and a mortgage banker is that a mortgage banker works for a lending institution (a bank, credit union, or others) to market and process loans only from that institution. There may be a wide variety of loans types to draw from, but all are products of that particular lending institution.

Also known as a "loan representative" or "account executive," a loan officer represents the borrower to the lending institution. From selecting a loan program to closing, a loan officer can walk you through the process. Lenders compensate the loan officers with a commission or salary.