Broker Vs. Loan Officer

When you need a mortgage loan, you should know the difference between a mortgage broker and a loan officer. As a new home is the result of the work of both mortgage broker and loan officer, people frequently confuse the two. However, it is valuable to know the ways they differ so you have clear expectations of them during the mortgage application process.

What is a Mortgage Broker?

During the mortgage loan process, an individual or firm who is an independent agent for the mortgage loan borrower as well as the wholesale lender is a mortgage broker. A mortgage broker coordinates the loan transaction 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 an individual, private investor. A mortgage broker will look at your finances to determine which lender is the best fit for your loan needs. Your broker will submit your loan application to several wholesale lenders, and works with the chosen lender until closing. At closing, the broker’s commission is given by the lender.

What is a Loan Officer?

Loan officers work for a particular lending institution (such as a bank) who process mortgages and other lending programs from their company alone. There may be an assortment of loans types to draw from although all are programs of that specific lending institution.

A loan officer (also called an “account executive” or “loan representative”) represents the borrower to the lending institution. The borrower is helped through the entire process, from loan selection to closing, by the loan officer. Lenders pay their loan officers a commission or salary.