Know the difference: Mortgage Brokers and Loan Officers

Either a mortgage broker or a loan officer may help you when it comes to applying for a mortgage loan. Because both reap the same result (a new home), people sometimes confuse the two job types. Yet recognizing the ways they differ is valuable to your mortgage loan process.

About Mortgage Brokers

A mortgage broker is a person or firm that works as 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 credit union, bank, trust company, finance company, mortgage corporation or even an individual investor. Which lender offers the loans that fits your financial situation? A mortgage broker will help you find the best one. You give your mortgage loan application to your broker, who offers it to several lenders. Your mortgage broker then guides your work with the lender chosen until the closing of the loan. The broker gets a commission from the borrower at closing.

What is a Mortgage Banker?

Lending Institutions (banks, finance companies, and others) employ mortgage bankers to promote, and process loans solely originated by that specific institution. They may have the ability to promote loans to fit many different situations, but all the loans are programs of the same lender.

Also called a "loan representative" or "account executive," a mortgage banker acts of behalf of the borrower to the lending institution. The borrower is walked through the whole process, from choosing the loan to closing, by the mortgage banker. Mortgage bankers are compensated with a commission or salary for their work by their employers.

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