Mortgage Broker vs. Loan Officer

When you need a mortgage , you should know the difference between a mortgage broker and a loan officer. Because a new home is the outcome of the work of both mortgage broker and loan officer, people sometimes confuse the two. Yet it will be important to know the difference between the two jobs so you have clear expectations of them as you enter your mortgage application process.

About Mortgage Brokers

A mortgage broker is a person or company that is an independent agent for the mortgage loan borrower as well as the lender. Your mortgage broker will stand as coordinator 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 partner with a mortgage broker to examine your financial circumstance and find the lender who has the best mortgage loan for you. Your broker will offer your loan application to a handful of lenders, and works with the chosen lender until closing. At closing, the broker's commission comes from the borrower.

What is a Mortgage Banker?

Loan officers are representatives of a specific lending institution (such as a bank, credit union, etc.) who promote and process mortgages and other loan programs originated by their company alone. There can be a wide range of loans types to choose from even though all are products of that particular lending institution.

Your mortgage banker will represent you to the bank or other lending institution. A loan officer will guide you through the application, processing and closing of the loan. Either a salary or commission is paid to mortgage brokers by their employers.

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