Mortgage Broker and Loan Officer

When you need a mortgage , you need to know the difference between a mortgage broker and a loan officer. It's common to confuse the two because both will reap the same result: a new home. But as you begin your application process, it will benefit you if you know 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 borrower as well as the lender. Your mortgage broker will stand as facilitator between you and the lending institution; which may be a bank, trust company, credit union, mortgage corporation, finance company or even an individual investor. You work with a mortgage broker to look at your financial situation and find the lender who has the right loan program for you. You deliver your mortgage application to your broker, who submits it to several lenders. Your mortgage broker then helps you work with the lender chosen until the loan closes. The borrower pays a commission to the broker at closing.

Loan Officers

The biggest difference between a mortgage broker and a mortgage banker is that a loan officer works on behalf of a lending institution (a bank, credit union, or others) to process loans only originated from that institution. There can be an assortment of loans types to choose from even though all are products of that particular lending institution.

Your loan officer represents you to the bank or other lending institution. The borrower is guided through the whole process, from loan selection to closing, by the loan officer. Loan officers are given a commission or salary for their services by their employers.