Know what to expect: Mortgage Brokers vs. Loan Officers

When you need a mortgage , you may work with a mortgage banker or you may choose to work with a mortgage broker. As both produce the same outcome (a new home), people frequently confuse them. But as you enter the application process, it can help if you recognize how they differ.

About Mortgage Brokers

During the mortgage loan process, an individual or group who is an independent agent for both mortgage loan applicant and lender is a mortgage broker. 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. You work with a mortgage broker to review your financial circumstance and lead you to the lender who has the right loan for you. You deliver your application to your broker, who submits it to one or more lenders. Your mortgage broker then guides your work with the lender chosen until the closing of the loan. The broker receives a commission from the borrower at closing.

What is a Loan Officer?

The main difference between a mortgage broker and a mortgage banker is that the latter is employed by a lending institution (a bank, credit union, or others) to process loans only from the programs of that institution. They may have the ability to offer loans to fit a variety of situations, but all the loans are products of the same lender.

A mortgage banker represents you to the bank or other lending institution. From finding a loan to closing, a loan officer will help you through the process. Mortgage bankers may be compensated with a commission or salary for their work by their employers.

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