Mortgage Broker vs. Loan Officer

Either a mortgage broker or a loan officer can work with you when you work on your application for a mortgage . Since both yield the same outcome (a new home), it's understandable to confuse the two. Yet it is helpful to know how they differ so you have clear expectations of them as you enter your mortgage process.

What is a Mortgage Broker?

A mortgage broker is a person or group that is an independent agent for both the mortgage loan applicant and the lender. Your mortgage broker will stand as coordinator between you and the lending institution; which may be a credit union, bank, trust company, finance company, mortgage corporation or even an individual investor. Which lender offers the loans that is best for you? A mortgage broker will guide you to the best one. From application to closing, your mortgage broker works with you: presenting your mortgage application to several lenders, and coordinating the process with the lender through to the closing of the loan. The broker is given a commission from the borrower upon closing.

What is a Loan Officer?

The biggest difference between a mortgage broker and a loan officer is that the latter is employed by a lending institution (a bank, credit union, or others) to promote and process loans solely from the programs of that institution. They may be able to market loans to fit a variety of situations, but all the loans will be programs of the same lender.

Also known as a "loan representative" or "account executive," a mortgage banker acts of behalf of the borrower to the lending institution. The borrower is walked through the entire process, from loan selection to closing, by the loan officer. Mortgage bankers will be given a commission or salary for their services by their employers.

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