Know what to expect: Mortgage Brokers and Loan Officers

Either a mortgage broker or a mortgage banker can help you when you need a mortgage loan. Since both a mortgage broker and lending officer can help you buy your new home, people can confuse them. However, knowing the differences between them is helpful to your mortgage loan process.

What is a Mortgage Broker?

During the mortgage loan process, an individual or firm who is an independent agent for the mortgage loan applicant as well as the lender is a mortgage broker. A mortgage broker facilitates 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 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, private investor. Which lender has the loans that fits your financial situation? A mortgage broker will lead you to the right one. You give your loan application to your broker, who presents it to various lenders. Your mortgage broker then guides your work with the lender chosen until the loan closes. The broker gets a commission from the borrower when the loan closes.

About Loan Officers

Mortgage Bankers represent a specific lending institution (such as a bank, credit union, etc.) who offer and process mortgages and other loan products originated by their employer alone. There can be a variety of loans types to choose from even though all are products of that particular lender.

A loan officer (also called an "account executive" or "loan representative") represents the borrower to the lender. The borrower is helped through the whole process, from loan selection to closing, by the mortgage banker. Lenders compensate their loan officers with a salary or commission.