Mortgage Broker vs. Loan Officer

When you apply for a mortgage loan, you should know the difference between a mortgage broker and a loan officer. As a new home is the outcome of the work of both mortgage broker and loan officer, it's common to confuse the two job types. However, it is useful to know the ways they differ so you know what to expect from them during the mortgage application process.

Mortgage Brokers

A mortgage broker is a person or group that works as an independent agent for both the mortgage loan borrower and the lender. Your mortgage broker will stand as facilitate 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. A mortgage broker can consider your numbers to determine which lender is the best fit for you. Your broker will offer your mortgage application to one or more lenders, and works with the chosen lender until closing. The broker receives a commission from the borrower at closing.

Loan Officers

The biggest difference between a mortgage broker and a loan officer is that the latter is employed by a lending institution (a bank, credit union, or others) to process loans solely from that institution. They may have the ability to offer loans to fit many different situations, but all the loans are products of the same lender.

Also known as a "loan representative" or "account executive," a loan officer represents the borrower to the lender. The loan officer will help you through the application, processing and loan closing. Lending institutions compensate the loan officers with a salary or commission.

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