Mortgage Broker or Loan Officer

Either a mortgage broker or a mortgage banker may work with you when you apply for a mortgage loan. As both reap the same result (a new home), it's understandable to confuse the two. However, understanding how they differ will be advantageous to your mortgage loan process.

What is a Mortgage Broker?

A mortgage broker is an individual or firm that serves as an independent agent for both the mortgage loan borrower and the lender. A mortgage broker facilitates 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 bank, trust company, credit union, mortgage corporation, finance company or even a private investor. Which lender offers the mortgage loans that fits your needs? A mortgage broker will help you find the best one. Your broker will offer your loan application to a handful of lenders, and works with the lender of choice until closing. The broker gets a commission from the borrower at closing.

About Loan Officers

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

Also called a "loan representative" or "account executive," a loan officer represents the borrower to the lending institution. The borrower is guided through the entire process, from selecting a loan to closing, by the loan officer. Loan officers are compensated with a commission or salary for their work by their employers.

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