Mortgage Broker vs. Loan Officer

When you need a mortgage loan, you may work with a mortgage banker or you may choose to work with a mortgage broker. Since both yield the same result (a new home), people sometimes confuse them. However, it is important to understand how they differ so you have clear expectations of them during the mortgage application process.

About Mortgage Brokers

A mortgage broker (either a group or an individual) is an independent agent for both the mortgage loan borrower and the lender. A mortgage broker facilitates things for you and your lender, which can be one of the following: a credit union, bank, trust company, finance company, mortgage corporation or even an individual, private investor. Acting as a facilitator between you and your lender, your mortgage broker can match you with a credit union, bank, trust company, finance company, mortgage corporation or even an individual investor. You partner with a mortgage broker to examine your financial circumstance and lead you to the lender who has the right mortgage loan for you. You give your mortgage loan application to your broker, who presents it to a number of lenders. Your mortgage broker then guides your work with the lender chosen until the closing of the loan. At closing, the broker's commission is paid by the borrower.

About Loan Officers

Lending Institutions (banks, finance companies, and others) employ mortgage bankers to offer, and process mortgage loans solely originated by that particular institution. Although a loan officer may offer quite a range of loan programs, they are all programs from that lender alone.

Also called a "loan representative" or "account executive," a loan officer represents the borrower to the lender. A mortgage banker will walk the borrower through the application, processing and closing of the loan. Either a salary or commission is paid to loan officers by their employers.