Mortgage Broker or Loan Officer

When it's time to locate a mortgage , you need to know the difference between a mortgage banker and a mortgage broker. Since both reap the same outcome (a new home), people usually confuse the two job types. However, it will be beneficial to understand the ways they differ so you have clear expectations of them as you enter your mortgage application process.

What is a Mortgage Broker?

A mortgage broker is an individual or group that acts as an independent agent for both the mortgage loan applicant and the lender. Your mortgage broker will stand as coordinator between you and the lending institution; which may be a bank, trust company, credit union, mortgage corporation, finance company or even a private investor. A mortgage broker can look at your numbers to determine which lender is the best fit for your loan needs. Your broker will present your mortgage loan application to several lenders, and works with the lender of choice until the loan closes. The borrower gives a commission to the broker at closing.

About Mortgage Bankers

The biggest difference between a mortgage broker and a mortgage banker is that a loan officer works for a lending institution (a bank, credit union, or others) to process loans only originated from the programs of that institution. They may be able to offer loans to fit a variety of situations, but all the loans are products from the same lender.

A loan officer (also called an "account executive" or "loan representative") acts on behalf of the borrower to the 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 mortgage brokers by their employers.