Know what to expect: Mortgage Brokers and Loan Officers

When you work on your application for a mortgage , you need to know the difference between a loan officer and a mortgage broker. Because both yield the same outcome (a new home), it's easy to confuse them. But as you enter your application process, it can help if you recognize how they differ.

What is a Mortgage Broker?

A mortgage broker is an individual or firm that serves as an independent agent for the mortgage loan applicant as well as 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. Which lender offers the loan programs that fits your needs? A mortgage broker will help you find the best fit. You deliver your mortgage application to your broker, who offers it to various lenders. Your mortgage broker then assists your work with the lender of choice until the loan closes. The borrower gives a commission to the broker if the loan closes.

Loan Officers

Loan officers work for a specific lending institution (such as a bank, credit union, etc.) who process mortgages and other loans for their place of employment alone. Although a mortgage banker may promote quite a variety of loans, they will be programs from that particular lender.

A loan officer (also called an "account executive" or "loan representative") acts on behalf of the borrower to the lending institution. The borrower is walked through the whole process, from finding the loan to closing, by the mortgage banker. Loan officers can be paid a commission or salary for their work by their employers.