Know the difference: Mortgage Brokers vs. Loan Officers

When you apply for a mortgage loan, you need to know the difference between a mortgage broker and a loan officer. As both yield the same result (a new home), people often confuse them. Yet knowing how they are different is valuable to your mortgage loan process.

About Mortgage Brokers

A mortgage broker (either a group or an individual) is an independent agent for both the mortgage loan borrower and 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, private investor. Which lender has the mortgage loans that is best for you? A mortgage broker will guide you to the right one. You deliver your loan application to your broker, who presents it to a number of lenders. Your mortgage broker then helps you work with the lender of choice until closing. The borrower submits a commission to the broker upon closing.

What is a Mortgage Banker?

Lending Institutions (banks, finance companies, and others) employ loan officers to offer, and process loans solely from that particular institution. They may be able to offer loans to fit a variety of situations, but all the loans will be programs of the same lender.

A loan officer (also called an "account executive" or "loan representative") acts on behalf of the borrower to the lending institution. The loan officer will walk the borrower through the selection, processing and closing of the loan. Either a salary or commission is paid to loan officers by their employers.