Mortgage Broker vs. Loan Officer

Either a mortgage broker or a mortgage banker can help you when you apply for a mortgage loan. Because both a mortgage broker and lending officer will help you buy a new home, people sometimes confuse the two. Yet understanding the differences between them will be beneficial to the mortgage loan process.

What is a Mortgage Broker?

During the mortgage loan process, an individual or firm who is an independent agent for both mortgage loan applicant and lender is a mortgage broker. Your mortgage broker will stand as coordinator between you and the lending institution; which may be a credit union, bank, trust company, finance company, mortgage corporation or even an individual, private investor. A mortgage broker will examine your numbers to find out which lender is the best fit for your loan needs. From application to closing, your mortgage broker works with you: submitting your application to a number of lenders, and coordinating the process with the lender through to the closing of your loan. The borrower gives a commission to the broker upon closing.

About Mortgage Bankers

The most important difference between a mortgage broker and a mortgage banker is that the latter works for a lending institution (a bank, credit union, or others) to market and process loans solely from the programs of that institution. There may be an assortment of loans types to draw from even though all are products of that specific lending institution.

A mortgage banker (also known as an "account executive" or "loan representative") represents the borrower to the lender. The loan officer can help you through the application, processing and closing of the loan. Either a salary or commission is given to loan officers by their employers.