Mortgage Broker or Loan Officer

When it's time to get a mortgage loan, you need to know the difference between a loan officer and a mortgage broker. Because a new home is the result of the work of both mortgage broker and mortgage banker, it's common to confuse the two job types. Yet it will be beneficial to recognize the ways they differ so you have clear expectations of them during your mortgage application process.

What is a Mortgage Broker?

A mortgage broker is someone or firm that 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 investor. You use a mortgage broker to examine your financial circumstance and lead you to the lender who has the right mortgage loan for you. Your broker will submit your mortgage loan application to several lenders, and works with the lender of choice until closing. The broker receives a commission from the borrower if the loan closes.

Loan Officers

The main difference between a mortgage broker and a loan officer is that a loan officer works for a lending institution (a bank, credit union, or others) to process loans only originated from that institution. While a mortgage banker may market quite a range of loan programs, they will be programs of that lender alone.

Also known as a "loan representative" or "account executive," a mortgage banker represents the borrower to the lending institution. From finding a loan to closing, a mortgage banker can guide a borrower through the process. Lending institutions compensate their mortgage bankers with a salary or commission.