Know the difference: Mortgage Brokers and Loan Officers

Either a mortgage broker or a mortgage banker can help you when you apply for a mortgage . People often confuse them because both will give the same result: a new home. However, knowing how they differ is useful to the mortgage loan process.

What is a Mortgage Broker?

During the mortgage loan process, an individual or group who is an independent agent for both mortgage loan applicant and lender is a mortgage broker. A mortgage broker coordinates things between 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 a private investor. Which lender offers the loan programs that is best for you? A mortgage broker will guide you to the best one. You deliver your mortgage loan application to your broker, who submits it to one or more lenders. Your mortgage broker then assists your work with the lender of choice until the closing of the loan. At closing, the broker's commission is given by the borrower.

What is a Mortgage Banker?

Lending Institutions (banks, finance companies, and others) employ mortgage bankers to promote, and process loans solely on behalf of that specific institution. They may be able to promote loans to fit many different situations, but all the loans will be programs of the same lender.

Also called a "loan representative" or "account executive," a mortgage banker acts of behalf of the borrower to the lender. The borrower is walked through the entire process, from choosing a loan to closing, by the mortgage banker. Loan officers may be paid a commission or salary for their services by their employers.