Know what to expect: Mortgage Brokers vs. Mortgage Bankers

When it comes to locating a mortgage loan, you need to know the difference between a loan officer and a mortgage broker. It's common to confuse these since both will produce the same outcome: a new home. However, understanding how they are different is advantageous to the mortgage process.

About Mortgage Brokers

During the mortgage loan process, an individual or company who is an independent agent for the mortgage loan borrower as well as the lender is a mortgage broker. A mortgage broker facilitates things between you and your lender, which can be one of the following: a bank, trust company, credit union, mortgage corporation, finance company or even an individual, private 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 an individual, private investor. A mortgage broker will examine your numbers to find out which lender is the best fit for your loan needs. You give your mortgage application to your broker, who presents it to various lenders. Your mortgage broker then assists your work with the lender of choice until the closing of the loan. When the loan closes, the broker's commission is given by the borrower.

About Loan Officers

Lending Institutions (banks, finance companies, and others) employ mortgage bankers to market, and process mortgage loans originated by that specific institution alone. While a loan officer may market quite a range of loans, they all are products of that one lender.

Your loan officer will represent you to the bank or other lending institution. The borrower is guided through the whole process, from choosing the loan to closing, by the loan officer. Either a salary or commission is paid to mortgage brokers by their employers.