Know the difference: Mortgage Brokers and Loan Officers

Either a mortgage broker or a loan officer may help you when it comes to applying for a mortgage loan. Since both a mortgage broker and lending officer will help you purchase a new home, it's common to confuse the two. Yet it will be beneficial to recognize the ways they differ so you have clear expectations of them during your mortgage application process.

Mortgage Brokers

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 facilitate between you and the lending institution; which can be a bank, trust company, credit union, mortgage corporation, finance company or even a private investor. You work with a mortgage broker to consider your financial situation and lead you to the lender who has the right loan program for you. From application to closing, your mortgage broker facilitates the loan process: offering your loan application to several lenders, and walking you with the chosen lender through to the closing of the loan. When the loan closes, the broker's commission is given by the borrower.

What is a Loan Officer?

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

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