Mortgage Broker vs. Loan Officer

When you work on your application for a mortgage loan, you may work with a loan officer or you may choose to work with a mortgage broker. As a new home is the result of the work of both mortgage broker and loan officer, people frequently confuse the two. But for your application process, it will help if you recognize how they are different.

Mortgage Brokers

A mortgage broker is an individual or company that works as an independent agent for the mortgage loan borrower as well as the lender. Your mortgage broker will stand as coordinator 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 review your financial circumstance and find the lender who has the best mortgage loan for you. You give your loan application to your broker, who submits it to several lenders. Your mortgage broker then helps you work with the lender of choice until closing. The borrower pays a commission to the broker upon closing.

About Loan Officers

Loan officers represent a particular lending institution (such as a bank) who promote and process mortgages and other lending programs for their place of employment alone. There can be a wide variety of loans types to draw from even though all are products of that specific lending institution.

Your loan officer will represent you to the bank or other lending institution. From selecting a loan product to closing, a loan officer will walk the borrower through the process. Lending institutions pay their loan officers a salary or commission.