Mortgage Broker vs. Loan Officer

When you apply for a mortgage , you may work with a loan officer or you may choose to work with a mortgage broker. It's understandable to confuse these as both will reap the same outcome: a new home. However, it will be useful to recognize the difference between the two jobs so you know what to expect from them as you enter the mortgage application process.

Mortgage Brokers

During the mortgage loan process, an individual or firm who is an independent agent for the mortgage loan borrower as well as the lender is a mortgage broker. Your mortgage broker will stand as coordinator between you and the lending institution; which may be a bank, trust company, credit union, mortgage corporation, finance company or even a private investor. A mortgage broker can examine your numbers to find out which lender is the right fit for your loan needs. You give your mortgage loan application to your broker, who offers it to various lenders. Your mortgage broker then guides your work with the lender chosen until closing. The borrower gives a commission to the broker upon closing.

Loan Officers

The main difference between a mortgage broker and a mortgage banker is that the latter works on behalf of a lending institution (a bank, credit union, or others) to process loans only originated from the products of that institution. They may be able to promote loans to fit a variety of situations, but all the loans are programs from the same lender.

A loan officer (also known as an "account executive" or "loan representative") represents the borrower to the lender. The loan officer can walk you through the application, processing and loan closing. Loan officers are compensated with a commission or salary for their services by their employers.

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