Know the difference: Mortgage Brokers and Loan Officers

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When you're looking to get a mortgage loan, you may work with a loan officer or you may choose to work with a mortgage broker. Since both a mortgage broker and lending officer can help you purchase a new home, it's common to confuse them. But for the application process, it will help if you understand how they are different.

Mortgage Brokers

During the mortgage loan process, an individual or group 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 a private 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 an individual investor. Which lender has the loan that is right for you? A mortgage broker will guide you to the right fit. Your broker will offer your mortgage 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.

What is a Loan Officer?

The main difference between a mortgage broker and a loan officer is that a loan officer works on behalf of a lending institution (a bank, credit union, or others) to process loans solely from that institution. Although a loan officer may market quite a range of loan programs, they will be programs of that particular lender.

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

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