Know the difference: Mortgage Brokers vs. Loan Officers

Either a mortgage broker or a loan officer may work with you when you're looking to get a mortgage . Because both a mortgage broker and mortgage banker will help you fund a new home, it's easy to confuse the two. However, knowing how they are different is helpful to the mortgage loan process.

What is a Mortgage Broker?

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 for 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 credit union, bank, trust company, finance company, mortgage corporation or even an individual, private investor. You partner with a mortgage broker to consider your financial situation and lead you to the lender who has the best loan program for you. From application to closing, your mortgage broker facilitates the loan process: submitting your application to several lenders, and coordinating the process with the lender through to the closing of the loan. Upon closing, the broker's commission is paid by the borrower.

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 company alone. They may be able to promote loans to fit many different situations, but all the loans are products from the same lender.

A loan officer represents you to the bank or other lending institution. From finding a loan program to closing, a mortgage banker will guide you through the process. Lending institutions pay their mortgage bankers a salary or commission.

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