Know what to expect: Mortgage Brokers vs. Loan Officers

When you apply for a mortgage loan, you may work with a loan officer or you may choose to work with a mortgage broker. It's understandable to confuse these as both will reap the same result: a new home. Yet knowing how they are different will be beneficial to the mortgage loan process.

What is a Mortgage Broker?

A mortgage broker is someone or firm that is an independent agent for the mortgage loan borrower as well as 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 an individual, private investor. A mortgage broker will look at your numbers to find out which lender is the best fit for your loan needs. Your broker will present your mortgage application to one or more lenders, and works with the chosen lender until closing. If the loan closes, the broker's commission is given by the borrower.

About Mortgage Bankers

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

Also called a "loan representative" or "account executive," a loan officer acts of behalf of the borrower to the lender. A mortgage banker can walk the borrower through the selection, processing and closing of the loan. Mortgage bankers will be paid a commission or salary for their work by their employers.