Know what to expect: Mortgage Brokers and Loan Officers

Either a mortgage broker or a loan officer can work with you when it's time to apply for a mortgage . It's understandable to confuse the two job types since both will reap the same result: a new home. Yet knowing the differences between them will be important to the mortgage loan process.

Mortgage Brokers

During the mortgage loan process, an individual or firm who is an independent agent for both mortgage loan borrower and lender is a mortgage broker. Your mortgage broker will stand as facilitator between you and the lending institution; which can be a bank, trust company, credit union, mortgage corporation, finance company or even an individual, private investor. You partner with a mortgage broker to analyze your financial circumstance and lead you to the lender who has the best loan program for you. From application to closing, your mortgage broker facilitates the loan process: submitting your loan application to a number of lenders, and walking you with the chosen lender through to the closing of the loan. The borrower pays a commission to the broker at closing.

What is a Mortgage Banker?

The biggest difference between a mortgage broker and a mortgage banker is that the latter is employed by a lending institution (a bank, credit union, or others) to offer and process loans only originated from the products of that institution. They may be able to offer loans to fit a variety of situations, but all the loans will be products from the same lender.

A loan officer (also called an "account executive" or "loan representative") acts on behalf of the borrower to the lending institution. A mortgage banker will help the borrower through the selection, processing and closing of the loan. Mortgage bankers are given a commission or salary for their work by their employers.