Mortgage Broker and Loan Officer

When it comes to applying for a mortgage , you should know the difference between a mortgage broker and a mortgage banker. As a new home is the result of the work of both mortgage broker and loan officer, people frequently confuse the two job types. But for the application process, it can benefit you if you know their differences.

What is a Mortgage Broker?

A mortgage broker (either a group or an individual) is an independent agent for both the mortgage loan applicant 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. A mortgage broker will analyze your financial situation to determine which lender is the best fit for you. Your broker will present your mortgage loan application to various lenders, and works with the lender of choice until the loan closes. The broker gets a commission from the borrower upon closing.

What is a Loan Officer?

The biggest difference between a mortgage broker and a mortgage banker is that the latter works on behalf of 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 choose from although all are products of that specific lender.

A loan officer (also called an "account executive" or "loan representative") acts on behalf of the borrower to the lender. From choosing a loan product to closing, a mortgage banker will walk you through the process. Lenders compensate the loan officers with a commission or salary.