Mortgage Broker vs. Loan Officer

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. Since both a mortgage broker and mortgage banker can help you purchase your new home, people often confuse the two. However, it is useful to recognize how they differ so you have clear expectations of them during the mortgage process.

What is a Mortgage Broker?

A mortgage broker is an individual or company that serves as 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 can be a bank, trust company, credit union, mortgage corporation, finance company or even an individual investor. A mortgage broker can review your financial situation to find out which lender is the right fit for your loan needs. Your broker will submit your mortgage application to a handful of lenders, and works with the lender of choice until closing. When the loan closes, the broker's commission is paid by the borrower.

What is a Mortgage Banker?

Loan officers represent a particular lending institution (such as a bank, credit union, etc.) who process mortgages and other loan products on behalf of their employer alone. They may have the ability to promote loans to fit a variety of situations, but all the loans are programs of the same lender.

Also called a "loan representative" or "account executive," a loan officer represents the borrower to the lending institution. The borrower is helped through the entire process, from choosing the loan to closing, by the loan officer. Lending institutions pay their mortgage bankers a salary or commission.

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