Know the difference: Mortgage Brokers and Loan Officers

When it comes to finding a mortgage loan, you may work with a loan officer or you may choose to work with a mortgage broker. Since both reap the same result (a new home), it's understandable to confuse the two job types. However, understanding how they are different will be advantageous to your mortgage loan process.

About Mortgage Brokers

A mortgage broker is a person or firm that 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 can be a credit union, bank, trust company, finance company, mortgage corporation or even an individual investor. A mortgage broker can look at your finances to determine which lender is the best fit for your loan needs. From application to closing, your mortgage broker works with you: offering your mortgage application to several lenders, and coordinating the process with the lender through to the closing of the loan. Upon closing, the broker's commission is paid by the borrower.

Loan Officers

Loan officers work for a specific lending institution (such as a bank) who process mortgages and other loans from their company alone. They may have the ability to offer loans to fit many different situations, but all the loans are products of the same lender.

Also called a "loan representative" or "account executive," a loan officer represents the borrower to the lending institution. The loan officer will walk the borrower through the selection, processing and closing of the loan. Loan officers are given a commission or salary for their services by their employers.