Know what to expect: Mortgage Brokers and Loan Officers

When you're looking to get a mortgage , you need to know the difference between a mortgage broker and a loan officer. As both produce the same outcome (a new home), people can confuse the two job types. But as you begin your application process, it will help if you recognize how they differ.

Mortgage Brokers

A mortgage broker (either a group or an individual) is an independent agent for both the mortgage loan applicant and 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 an individual, private investor. You use a mortgage broker to look at your financial situation and find the lender who has the best loan for you. Your broker will offer your mortgage loan application to several lenders, and works with the lender of choice until the loan closes. The borrower gives a commission to the broker if the loan closes.

Mortgage Bankers

Lending Institutions (banks, finance companies, and others) employ mortgage bankers to offer, and process mortgage loans from that specific institution alone. There may be a variety of loans types to draw from although all are programs of that specific lending institution.

Also known as a "loan representative" or "account executive," a loan officer acts of behalf of the borrower to the lending institution. From selecting a loan product to closing, a mortgage banker will walk the borrower through the process. Mortgage bankers are given a commission or salary for their work by their employers.