Know what to expect: Mortgage Brokers vs. Loan Officers

When it's time to apply for a mortgage , you should know the difference between a mortgage banker and a mortgage broker. People frequently confuse them since both will yield the same outcome: a new home. Yet understanding the ways they differ will be helpful to your mortgage loan process.

What is a Mortgage Broker?

A mortgage broker is an individual or company that acts as an independent agent for both the mortgage loan applicant and the lender. A mortgage broker coordinates things between you and your lender, which can be one of the following: a bank, trust company, credit union, mortgage corporation, finance company or even an individual, private investor. Acting as a facilitator between you and your lender, your mortgage broker can match you with a bank, trust company, credit union, mortgage corporation, finance company or even an individual, private investor. You partner with a mortgage broker to consider your financial situation and lead you to the lender who has the best loan for you. Your broker will submit your loan application to various lenders, and works with the chosen lender until closing. When the loan closes, the broker's commission comes from the borrower.

Loan Officers

Mortgage Bankers are representatives of a particular lending institution (such as a bank, credit union, etc.) who offer and process mortgages and other loan programs originated by their employer alone. They may be able to market loans to fit many different situations, but all the loans are programs of the same lender.

Also called a "loan representative" or "account executive," a mortgage banker represents the borrower to the lender. From selecting a loan product to closing, a mortgage banker will walk a borrower through the process. Either a salary or commission is given to mortgage brokers by their employers.