Know the difference: Mortgage Brokers and Loan Officers

When you apply for a mortgage loan, you need to know the difference between a mortgage banker and a mortgage broker. As both a mortgage broker and lending officer will help you fund your new home, it's easy to confuse them. Yet understanding how they differ is beneficial to the mortgage process.

Mortgage Brokers

During the mortgage loan process, an individual or group who is an independent agent for the mortgage loan applicant as well as the 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 investor. You use a mortgage broker to examine your financial circumstance and lead you to the lender who has the right mortgage loan for you. From application to closing, your mortgage broker facilitates your loan process: offering your loan application to a number of lenders, and walking you with the chosen lender through to the closing of your loan. The borrower gives a commission to the broker upon closing.

What is a Loan Officer?

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

A mortgage banker (also called an "account executive" or "loan representative") represents the borrower to the lending institution. The mortgage banker can guide the borrower through the selection, processing and loan closing. Lending institutions give their loan officers a salary or commission.

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