Know the difference: Mortgage Brokers vs. Loan Officers

When it comes to finding a mortgage , you should know the difference between a loan officer and a mortgage broker. It's common to confuse the two since both will give the same result: a new home. However, it is important to know the difference between the two jobs so you have clear expectations of them as you enter the mortgage process.

About Mortgage Brokers

A mortgage broker is a person or firm that is an independent agent for both the mortgage loan borrower and the lender. Your mortgage broker will stand as facilitator between you and the lending institution; which can be a credit union, bank, trust company, finance company, mortgage corporation or even an individual investor. You use a mortgage broker to look at your financial circumstance and lead you to the lender who has the right mortgage loan for you. You give your mortgage application to your broker, who submits it to various lenders. Your mortgage broker then guides your work with the lender chosen until the loan closes. The borrower submits a commission to the broker upon closing.

What is a Loan Officer?

The most important difference between a mortgage broker and a loan officer is that a loan officer works on behalf of a lending institution (a bank, credit union, or others) to market and process loans solely from that institution. There can be a wide range of loans types to draw from although all are programs of that particular lending institution.

A mortgage banker represents you to the bank or other lending institution. The borrower is helped through the entire process, from loan selection to closing, by the mortgage banker. Either a salary or commission is paid to loan officers by their employers.