Mortgage Broker vs. Loan Officer

When it's time to find a mortgage loan, you may work with a loan officer or you may choose to work with a mortgage broker. Because a new home is the result of the work of both mortgage broker and loan officer, people frequently confuse them. However, it is important to know the ways they differ so you know what to expect from them as you enter your mortgage application process.

Mortgage Brokers

During the mortgage loan process, an individual or group who is an independent agent for both mortgage loan applicant and lender is a mortgage broker. A mortgage broker facilitates things for you and your lender, which can be one of the following: a bank, trust company, credit union, mortgage corporation, finance company 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 a private investor. You work with a mortgage broker to consider your financial circumstance and lead you to the lender who has the best loan for you. From application to closing, your mortgage broker works with you: submitting your application to a number of lenders, and coordinating the process with the lender through to closing. If the loan closes, the broker's commission is paid by the borrower.

What is a Loan Officer?

Lending Institutions (banks, finance companies, and others) employ loan officers to promote, and process loans originated by that particular institution alone. They may have the ability to promote loans to fit a variety of situations, but all the loans will be programs of the same lender.

A loan officer (also known as an "account executive" or "loan representative") acts on behalf of the borrower to the lender. From selecting a loan program to closing, a loan officer will walk you through the process. Lenders compensate the loan officers with a commission or salary.