Know the difference: Mortgage Brokers and Loan Officers

Either a mortgage broker or a loan officer can help you when it's time to find a mortgage loan. Since both a mortgage broker and mortgage banker can help you purchase your new home, it's common to confuse the two. Yet it will be valuable to recognize the difference between the two jobs so you have clear expectations of them during your mortgage application process.

What is a Mortgage Broker?

A mortgage broker is an individual or company that is an independent agent for both the mortgage loan applicant and the lender. Your mortgage broker will stand as facilitator between you and the lending institution; which may be a bank, trust company, credit union, mortgage corporation, finance company or even a private investor. Which lender offers the mortgage loans that fits your needs? A mortgage broker will help you find the right one. From application to closing, your mortgage broker facilitates the loan process: offering your mortgage application to a number of lenders, and walking you with the chosen lender through to closing. If the loan closes, the broker's commission comes from the borrower.

What is a Loan Officer?

The most important difference between a mortgage broker and a mortgage banker is that the latter works for a lending institution (a bank, credit union, or others) to market and process loans solely from that institution. There may be a wide range of loans types to draw from even though all are products of that particular lending institution.

A loan officer will represent you to the bank or other lending institution. From finding a loan to closing, a mortgage banker can help the borrower through the process. Lending institutions compensate the mortgage bankers with a salary or commission.