Know the difference: Mortgage Brokers and Loan Officers

When you need a mortgage , you need to know the difference between a mortgage broker and a mortgage banker. Because both reap the same outcome (a new home), people sometimes confuse the two job types. However, recognizing how they are different will be advantageous to your mortgage loan process.

About Mortgage Brokers

A mortgage broker (either a group or an individual) is an independent agent for the mortgage loan applicant as well as the lender. A mortgage broker coordinates things for you and your lender, which can be one of the following: a credit union, bank, trust company, finance company, mortgage corporation or even an individual, 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 a private investor. A mortgage broker can examine your finances to find out which lender is the right fit for your loan needs. From application to closing, your mortgage broker works with you: offering your loan application to several lenders, and walking you with the chosen lender through to closing. The borrower gives a commission to the broker upon closing.

Loan Officers

Loan officers work for a particular lending institution (such as a bank, credit union, etc.) who market and process mortgages and other loans for their place of employment alone. There may be an assortment of loans types to choose from although all are products of that particular lending institution.

A loan officer (also known as an "account executive" or "loan representative") represents the borrower to the lending institution. From selecting a loan program to closing, a mortgage banker can help the borrower through the process. Either a salary or commission is given to mortgage brokers by their employers.