Know what to expect: Mortgage Brokers vs. Loan Officers

When you need a mortgage loan, you need to know the difference between a mortgage broker and a mortgage banker. As both yield the same outcome (a new home), people can confuse them. But as you begin the application process, it will help if you know they ways they differ.

Mortgage Brokers

A mortgage broker (either a group or an individual) is an independent agent for both the mortgage loan applicant and the lender. A mortgage broker coordinates things between you and your lender, which can be one of the following: a credit union, bank, trust company, finance company, mortgage corporation 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, private investor. You use a mortgage broker to analyze your financial situation and lead you to the lender who has the right mortgage loan for you. Your broker will submit your loan application to a handful of lenders, and works with the lender of choice until closing. At closing, the broker's commission comes from the borrower.

About Loan Officers

Mortgage Bankers work for a particular lending institution (such as a bank) who process mortgages and other loans on behalf of their employer alone. They may have the ability to promote loans to fit a variety of situations, but all the loans are products from the same lender.

A loan officer (also known as an "account executive" or "loan representative") represents the borrower to the lending institution. The borrower is guided through the whole process, from selecting the loan to closing, by the mortgage banker. Mortgage bankers are paid a commission or salary for their work by their employers.