Mortgage Broker and Loan Officer

When you work on your application for a mortgage loan, you may work with a loan officer or you may choose to work with a mortgage broker. Since a new home is the outcome of the work of both mortgage broker and loan officer, it's easy to confuse them. But as you enter the application process, it will benefit you if you understand how they are different.

What is a Mortgage Broker?

A mortgage broker is an individual or group that serves as 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 bank, trust company, credit union, mortgage corporation, finance company or even an individual investor. Which lender has the mortgage loans that is best for you? A mortgage broker will help you find the best fit. From application to closing, your mortgage broker facilitates the loan process: presenting your application to a number of lenders, and walking you with the chosen lender through to the closing of your loan. The broker receives a commission from the borrower upon closing.

What is a Mortgage Banker?

The most important difference between a mortgage broker and a loan officer is that a mortgage banker is employed by a lending institution (a bank, credit union, or others) to market and process loans solely originated from the products of that institution. They may be able to offer loans to fit a variety of situations, but all the loans will be products from the same lender.

Also called a "loan representative" or "account executive," a loan officer acts of behalf of the borrower to the lender. From finding a loan to closing, a mortgage banker can help a borrower through the process. Loan officers may be given a commission or salary for their services by their employers.