Know the difference: Mortgage Brokers and Loan Officers

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When you apply for a mortgage loan, you should know the difference between a loan officer and a mortgage broker. Since a new home is the result of the work of both mortgage broker and loan officer, people sometimes confuse the two. But for your application process, it will help if you understand their differences.

About Mortgage Brokers

During the mortgage loan process, an individual or company who is an independent agent for both mortgage loan applicant and lender is a mortgage broker. A mortgage broker facilitates things for 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 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 find the lender who has the best mortgage loan for you. Your broker will present your loan application to various lenders, and works with the chosen lender until the loan closes. At closing, the broker's commission is paid by the borrower.

What is a Loan Officer?

Lending Institutions (banks, finance companies, and others) employ loan officers to market, and process loans originated by that specific institution alone. Although a loan officer may promote quite a variety of loans, they will be programs from that particular lender.

Also known as a "loan representative" or "account executive," a loan officer acts of behalf of the borrower to the lending institution. A loan officer will guide the borrower through the selection, processing and loan closing. Either a salary or commission is given to loan officers by their employers.

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