Mortgage Broker vs. Loan Officer

Either a mortgage broker or a loan officer may work with you when you're looking to get a mortgage . Because both a mortgage broker and lending officer will help you fund a new home, it's easy to confuse them. But as you enter the application process, it can help if you know their differences.

Mortgage Brokers

A mortgage broker (either a company or an individual) is an independent agent for both the mortgage loan borrower and 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 a private investor. You work with a mortgage broker to look at your financial situation and find the lender who has the best loan for you. From application to closing, your mortgage broker facilitates your loan process: offering your loan application to a number of lenders, and walking you with the chosen lender through to the closing of the loan. The broker is given a commission from the borrower at closing.

Mortgage Bankers

Loan officers are representatives of a specific lending institution (such as a bank) who market and process mortgages and other loan products for their employer alone. They may be able to market loans to fit many different situations, but all the loans are programs from the same lender.

A loan officer will represent you to the bank or other lending institution. The borrower is guided through the whole process, from selecting a loan to closing, by the loan officer. Either a salary or commission is paid to loan officers by their employers.