Mortgage Broker and Loan Officer

When you're looking to get a mortgage , you may work with a mortgage banker 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 mortgage banker, people can confuse the two. Yet recognizing how they differ is important to the mortgage loan process.

About Mortgage Brokers

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 bank, trust company, credit union, mortgage corporation, finance company 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 investor. A mortgage broker will look at your finances to determine which lender is the best fit for you. From application to closing, your mortgage broker works with you: presenting your application to a number of lenders, and coordinating the process with the lender through to closing. The broker gets a commission from the borrower at closing.

Loan Officers

The biggest difference between a mortgage broker and a mortgage banker is that the latter works for a lending institution (a bank, credit union, or others) to offer and process loans solely from the products of that institution. They may have the ability to offer loans to fit a variety of situations, but all the loans will be products from the same lender.

Also known as a "loan representative" or "account executive," a mortgage banker represents the borrower to the lending institution. The mortgage banker will walk the borrower through the application, processing and loan closing. Either a salary or commission is paid to loan officers by their employers.