Know the difference: Mortgage Brokers vs. Loan Officers

When it comes to getting a mortgage loan, you should know the difference between a mortgage broker and a mortgage banker. Because both a mortgage broker and lending officer will help you buy a new home, it's easy to confuse them. But for your application process, it will help if you understand they ways they differ.

What is a Mortgage Broker?

A mortgage broker (either a group or an individual) is an independent agent for the mortgage loan applicant as well as the lender. A mortgage broker facilitates things between you and your lender, which can be one of the following: a credit union, bank, trust company, finance company, mortgage corporation or even a private investor. Acting as a facilitator between you and your lender, your mortgage broker can match you with a bank, trust company, credit union, mortgage corporation, finance company or even an individual, private investor. You partner with a mortgage broker to consider your financial circumstance and find the lender who has the right loan for you. From application to closing, your mortgage broker facilitates the loan process: submitting your mortgage application to a number of lenders, and coordinating the process with the lender through to closing. The broker receives a commission from the borrower at closing.

Mortgage Bankers

The biggest difference between a mortgage broker and a mortgage banker is that a mortgage banker works on behalf of a lending institution (a bank, credit union, or others) to promote and process loans only from the products of that institution. There may be a wide variety of loans types to choose from although all are programs of that specific lending institution.

Also called a "loan representative" or "account executive," a loan officer acts of behalf of the borrower to the lender. The borrower is walked through the entire process, from choosing a loan to closing, by the mortgage banker. Lenders compensate the loan officers with a salary or commission.