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Mortgage Broker vs. Loan Officer

When it's time to apply for a mortgage loan, you may work with a loan officer or you may choose to work with a mortgage broker. Because both reap the same outcome (a new home), it's common to confuse them. But as you enter your application process, it can help if you recognize how they differ.

What is a Mortgage Broker?

A mortgage broker (either a group or an individual) is an independent agent for the mortgage loan applicant as well as the lender. 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 can look at your financial situation to determine which lender is the best fit for your loan needs. You deliver your application to your broker, who submits it to a number of lenders. Your mortgage broker then guides your work with the lender chosen until the loan closes. The broker receives a commission from the borrower at closing.

What is a Mortgage Banker?

Lending Institutions (banks, finance companies, and others) employ loan officers to offer, and process mortgage loans solely originated by that particular institution. There may be a variety of loans types to draw from even though all are products of that particular lending institution.

Your mortgage banker represents you to the bank or other lending institution. The mortgage banker will help you through the selection, processing and loan closing. Lending institutions compensate the mortgage bankers with a salary or commission.