Know the difference: Mortgage Brokers vs. Loan Officers

When you work on your application for a mortgage loan, you may work with a mortgage banker or you may choose to work with a mortgage broker. Because both a mortgage broker and lending officer can help you buy a new home, people sometimes confuse them. Yet knowing how they are different will be valuable to your mortgage process.

What is a Mortgage Broker?

A mortgage broker (either a firm or an individual) is an independent agent for both the mortgage loan borrower and the lender. Your mortgage broker will stand as coordinator between you and the lending institution; which can be a credit union, bank, trust company, finance company, mortgage corporation or even an individual investor. You use a mortgage broker to review your financial situation and find the lender who has the best mortgage loan for you. From application to closing, your mortgage broker works with you: presenting your mortgage application to several lenders, and coordinating the process with the lender through to the closing of the loan. The broker gets a commission from the lending institution at closing.

About Mortgage Bankers

Lending Institutions (banks, finance companies, and others) employ mortgage bankers to promote, and process loans solely from that specific institution. They may be able to promote loans to fit a variety of situations, but all the loans will be programs from the same lender.

Also called a "loan representative" or "account executive," a mortgage banker acts of behalf of the borrower to the lender. They often have more strict underwriting guidelines and A loan officer can guide you through the application, processing and loan closing. Mortgage bankers are paid a commission or salary for their work by their employers.