Know the difference: Mortgage Brokers and Loan Officers

When you work on your application for a mortgage , you may work with a loan officer or you may choose to work with a mortgage broker. People often confuse the two job types because both will produce the same result: a new home. However, it is important to recognize the difference between them so you have clear expectations of them during the mortgage process.

Mortgage Brokers

A mortgage broker is someone or group that is an independent agent for both the mortgage loan borrower and the lender. A mortgage broker coordinates things between 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 credit union, bank, trust company, finance company, mortgage corporation or even a private investor. A mortgage broker will review your finances to find out which lender is the right fit for your loan needs. Your broker will submit your mortgage application to one or more lenders, and works with the lender of choice until the loan closes. If the loan closes, the broker's commission is given by the borrower.

Loan Officers

Lending Institutions (banks, finance companies, and others) employ mortgage bankers to offer, and process mortgage loans solely on behalf of that particular institution. There can be an assortment of loans types to choose from even though all are products of that specific lender.

A mortgage banker (also known as an "account executive" or "loan representative") acts on behalf of the borrower to the lender. The mortgage banker will help the borrower through the selection, processing and loan closing. Either a salary or commission is paid to loan officers by their employers.

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