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. Since both a mortgage broker and lending officer will help you fund a new home, it's understandable to confuse them. Yet it is valuable to know the difference between them so you know what to expect from them as you enter your mortgage application process.

About 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 may be a credit union, bank, trust company, finance company, mortgage corporation or even a private investor. You work with a mortgage broker to examine your financial circumstance and lead you to the lender who has the best mortgage loan for you. From application to closing, your mortgage broker works with you: offering your loan application to a number of lenders, and walking you with the chosen lender through to the closing of your loan. Upon closing, the broker's commission comes from the borrower.

Loan Officers

Lending Institutions (banks, finance companies, and others) employ loan officers to offer, and process loans from that particular institution alone. There can be an assortment of loans types to choose from, but all are products of that particular lender.

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