Mortgage Broker or Mortgage Banker

When it comes to getting a mortgage , you need to know the difference between a loan officer and a mortgage broker. Because a new home is the outcome of the work of both mortgage broker and loan officer, it's common to confuse them. But for your application process, it will benefit you if you understand how they differ.

About Mortgage Brokers

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 coordinator between you and the lending institution; which may be a bank, trust company, credit union, mortgage corporation, finance company or even a private investor. Which lender offers the mortgage loans that fits your needs? A mortgage broker will help you find the right one. Your broker will submit your mortgage loan application to several lenders, and works with the chosen lender until closing. Upon closing, the broker's commission is given by the borrower.

Loan Officers

Lending Institutions (banks, finance companies, and others) employ mortgage bankers to offer, and process loans originated by that specific institution alone. There can be an assortment of loans types to draw from although all are products of that specific lending institution.

A loan officer (also called an "account executive" or "loan representative") acts on behalf of the borrower to the lender. From selecting a loan program to closing, a mortgage banker will walk a borrower through the process. Loan officers can be given a commission or salary for their work by their employers.