Mortgage Broker or Loan Officer

Either a mortgage broker or a mortgage banker can work with you when you work on your application for a mortgage loan. Since a new home is the result of the work of both mortgage broker and mortgage banker, it's understandable to confuse them. Yet understanding how they are different will be advantageous to the mortgage loan process.

About Mortgage Brokers

A mortgage broker (either a company 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 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. You partner with a mortgage broker to analyze your financial situation and find the lender who has the right loan program for you. Your broker will offer your mortgage loan application to one or more lenders, and works with the lender of choice until the loan closes. The borrower submits a commission to the broker at closing.

What is a Mortgage Banker?

The main difference between a mortgage broker and a mortgage banker is that a loan officer is employed by a lending institution (a bank, credit union, or others) to promote and process loans solely originated from that institution. There can be an assortment of loans types to draw from, but all are products of that specific lender.

A mortgage banker (also called an "account executive" or "loan representative") acts on behalf of the borrower to the lender. The borrower is helped through the whole process, from finding the loan to closing, by the mortgage banker. Loan officers are paid a commission or salary for their services by their employers.