Mortgage Broker vs. Loan Officer

Either a mortgage broker or a loan officer may work with you when it's time to find a mortgage loan. Since both yield the same outcome (a new home), people usually confuse the two. However, understanding how they differ will be useful to your mortgage loan process.

About 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. Your mortgage broker will stand as facilitator between you and the lending institution; which may be a bank, trust company, credit union, mortgage corporation, finance company or even an individual, private investor. A mortgage broker will look at your numbers to find out which lender is the best fit for your loan needs. Your broker will submit your mortgage application to a handful of lenders, and works with the chosen lender until the loan closes. The borrower gives a commission to the broker upon closing.

About Loan Officers

The main 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 originated from the programs of that institution. They may be able to promote loans to fit many different situations, but all the loans will be programs of the same lender.

Also called a "loan representative" or "account executive," a mortgage banker represents the borrower to the lending institution. The borrower is helped through the entire process, from loan selection to closing, by the mortgage banker. Either a salary or commission is paid to mortgage brokers by their employers.