Know what to expect: Mortgage Brokers vs. Mortgage Bankers

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. It's common to confuse these because both will give the same result: a new home. However, it is useful to recognize the difference between them so you know what to expect from them as you enter your mortgage application process.

Mortgage Brokers

A mortgage broker is an individual or group that acts as 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. You partner with a mortgage broker to review your financial situation and lead you to the lender who has the best loan for you. From application to closing, your mortgage broker facilitates the loan process: submitting your mortgage application to several lenders, and coordinating the process with the lender through to closing. Upon closing, the broker's commission is given by the borrower.

What is a Loan Officer?

Loan officers represent a particular lending institution (such as a bank, credit union, etc.) who market and process mortgages and other loan products originated by their company alone. There can be a wide variety of loans types to draw from although all are programs of that particular lending institution.

Also known as a "loan representative" or "account executive," a loan officer acts of behalf of the borrower to the lending institution. From choosing a loan program to closing, a mortgage banker will help you through the process. Either a salary or commission is paid to mortgage brokers by their employers.