Know the difference: Mortgage Brokers and Loan Officers

When you work on your application for a mortgage , you need to know the difference between a mortgage broker and a loan officer. Since a new home is the outcome of the work of both mortgage broker and loan officer, people frequently confuse the two. Yet understanding how they are different will be beneficial to your mortgage process.

Mortgage Brokers

A mortgage broker is someone or firm that acts as an independent agent for the mortgage loan borrower as well as the lender. Your mortgage broker will stand as facilitator 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 can examine your finances to find out which lender is the right fit for you. From application to closing, your mortgage broker facilitates the loan process: offering your mortgage application to a number of lenders, and walking you with the chosen lender through to closing. At closing, the broker's commission is given by the borrower.

Mortgage Bankers

The biggest difference between a mortgage broker and a mortgage banker is that a loan officer works on behalf of a lending institution (a bank, credit union, or others) to process loans solely originated from the products of that institution. There may be a wide range of loans types to draw from, but all are products of that particular lender.

A loan officer will represent you to the bank or other lending institution. The borrower is walked through the entire process, from finding a loan to closing, by the loan officer. Either a salary or commission is given to loan officers by their employers.