Mortgage Broker or Loan Officer

When you apply for a mortgage loan, you may work with a loan officer or you may choose to work with a mortgage broker. Since both give the same result (a new home), it's understandable to confuse the two job types. However, it will be beneficial to know how they differ so you have clear expectations of them as you enter the mortgage process.

What is a Mortgage Broker?

During the mortgage loan process, an individual or company who is an independent agent for both mortgage loan applicant and lender is a mortgage broker. A mortgage broker facilitates things for you and your lender, which can be one of the following: a bank, trust company, credit union, mortgage corporation, finance company or even an individual 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 a private investor. Which lender offers the mortgage loans that is right for you? A mortgage broker will help you find the best one. Your broker will present your mortgage application to a handful of lenders, and works with the lender of choice until closing. The broker is given a commission from the borrower upon closing.

Loan Officers

The biggest difference between a mortgage broker and a loan officer is that a loan officer is employed by a lending institution (a bank, credit union, or others) to process loans solely from that institution. They may have the ability to offer loans to fit a variety of situations, but all the loans are products from the same lender.

Also known as a "loan representative" or "account executive," a loan officer represents the borrower to the lending institution. A mortgage banker will guide the borrower through the application, processing and loan closing. Lenders compensate their mortgage bankers with a salary or commission.