Know the difference: Mortgage Brokers and Mortgage Bankers

When you're looking to get a mortgage , you should know the difference between a mortgage broker and a loan officer. It's easy to confuse the two job types because both will reap the same result: a new home. Yet recognizing how they differ is important to the mortgage process.

About Mortgage Brokers

During the mortgage loan process, an individual or company who is an independent agent for both mortgage loan borrower and lender is a mortgage broker. 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 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 investor. You work with a mortgage broker to look at your financial circumstance and lead you to the lender who has the right loan program for you. You deliver your mortgage loan application to your broker, who presents it to several lenders. Your mortgage broker then helps you work with the lender of choice until closing. Upon closing, the broker's commission is given by the borrower.

What is a Loan Officer?

Lending Institutions (banks, finance companies, and others) employ mortgage bankers to offer, and process loans solely on behalf of that specific institution. There can be an assortment of loans types to choose from even though all are products of that particular lender.

Also called a "loan representative" or "account executive," a loan officer represents the borrower to the lender. From selecting a loan product to closing, a loan officer will help you through the process. Loan officers may be paid a commission or salary for their services by their employers.