Mortgage Broker or Mortgage Banker

When you're looking to get a mortgage loan, you may work with a loan officer or you may choose to work with a mortgage broker. Because a new home is the result of the work of both mortgage broker and loan officer, it's easy to confuse the two job types. However, recognizing how they differ will be valuable to your mortgage loan process.

Mortgage Brokers

A mortgage broker is a person or company 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 may 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 find the lender who has the right loan program for you. Your broker will submit your mortgage application to one or more lenders, and works with the lender of choice until the loan closes. The broker receives a commission from the borrower when the loan closes.

What is a Loan Officer?

Lending Institutions (banks, finance companies, and others) employ loan officers to promote, and process loans solely originated by that specific institution. Although a mortgage banker may market quite a variety of loans, they will be products with that lender alone.

Also known as a "loan representative" or "account executive," a loan officer acts of behalf of the borrower to the lending institution. The borrower is guided through the whole process, from choosing the loan to closing, by the mortgage banker. Loan officers are compensated with a commission or salary for their work by their employers.

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