Know the difference: Mortgage Brokers vs. Loan Officers

When it's time to find a mortgage , you may work with a loan officer or you may choose to work with a mortgage broker. As both a mortgage broker and mortgage banker will help you buy your new home, people can confuse the two. But as you begin the application process, it will help if you understand how they differ.

Mortgage Brokers

A mortgage broker is someone or group that serves as an independent agent for the mortgage loan borrower as well as the lender. A mortgage broker coordinates things between you and your lender, which can be one of the following: a credit union, bank, trust company, finance company, mortgage corporation or even an individual investor. Acting as a facilitator between you and your lender, your mortgage broker can match you with a credit union, bank, trust company, finance company, mortgage corporation or even an individual, private investor. You work with a mortgage broker to look at your financial situation and lead you to the lender who has the right mortgage loan for you. Your broker will present your mortgage application to various lenders, and works with the lender of choice until the loan closes. The broker receives a commission from the borrower when the loan closes.

What is a Mortgage Banker?

Lending Institutions (banks, finance companies, and others) employ loan officers to market, and process mortgage loans from that specific institution alone. There can be a variety of loans types to draw from although all are products of that specific lender.

Your loan officer represents you to the bank or other lending institution. From selecting a loan product to closing, a loan officer will help the borrower through the process. Mortgage bankers will be compensated with a commission or salary for their services by their employers.