Know the difference: Mortgage Brokers vs. Loan Officers

Either a mortgage broker or a loan officer can assist you when you work on your application for a mortgage loan. Since both a mortgage broker and mortgage banker can help you purchase a new home, it's understandable to confuse them. However, it is useful to understand the difference between them so you know what to expect from them as you enter the mortgage application process.

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. A mortgage broker facilitates things for you and your lender, which can be one of the following: a credit union, bank, trust company, finance company, mortgage corporation or even an individual investor. Acting as a facilitator between you and your lender, your mortgage broker can match you with a bank, trust company, credit union, mortgage corporation, finance company or even an individual investor. You work with a mortgage broker to analyze your financial circumstance and lead you to the lender who has the best loan program for you. From application to closing, your mortgage broker works with you: offering your mortgage application to several lenders, and walking you with the chosen lender through to closing. The borrower gives a commission to the broker at closing.

Loan Officers

Mortgage Bankers are representatives of a specific lending institution (such as a bank, credit union, etc.) who work with mortgages and other lending programs for their place of employment alone. They may be able to market loans to fit many different situations, but all the loans are programs from the same lender.

A loan officer (also known as an "account executive" or "loan representative") acts on behalf of the borrower to the lender. The borrower is walked through the entire process, from selecting the loan to closing, by the loan officer. Mortgage bankers are paid a commission or salary for their work by their employers.

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