Know what to expect: Mortgage Brokers vs. Loan Officers

When you work on your application for a mortgage loan, you may work with a loan officer or you may choose to work with a mortgage broker. People frequently confuse the two job types because both will produce the same outcome: a new home. But as you enter the application process, it will help if you recognize their differences.

About Mortgage Brokers

A mortgage broker is someone or firm that 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 bank, trust company, credit union, mortgage corporation, finance company or even an individual investor. A mortgage broker will consider your numbers to determine which lender is the best fit for your loan needs. You deliver your loan application to your broker, who offers it to several lenders. Your mortgage broker then guides your work with the lender chosen until closing. At closing, the broker's commission comes from the borrower.

What is a Mortgage Banker?

The biggest difference between a mortgage broker and a loan officer is that a mortgage banker is employed by a lending institution (a bank, credit union, or others) to promote and process loans only from the products of that institution. They may be able to promote loans to fit many different situations, but all the loans will be products of the same lender.

A loan officer (also called an "account executive" or "loan representative") represents the borrower to the lender. The borrower is walked through the whole process, from selecting a loan to closing, by the loan officer. Either a salary or commission is given to loan officers by their employers.