Mortgage Broker vs. Loan Officer
When it's time to apply for a mortgage loan, you need to know the difference between a mortgage broker and a loan officer. People can confuse the two because both will produce the same result: a new home. Yet it is beneficial to recognize the difference between them so you know what to expect from them during your mortgage application process.
About Mortgage Brokers
A mortgage broker (either a firm or an individual) is an independent agent for the mortgage loan borrower as well as the lender. Your mortgage broker will stand as coordinator between you and the lending institution; which can be a bank, trust company, credit union, mortgage corporation, finance company or even an individual investor. You use a mortgage broker to consider your financial circumstance and lead you to the lender who has the right loan program for you. You give your application to your broker, who presents it to a number of lenders. Your mortgage broker then guides your work with the lender of choice until closing. The borrower submits a commission to the broker when the loan closes.
Mortgage Bankers are representatives of a specific lending institution (such as a bank, credit union, etc.) who work with mortgages and other lending programs for their company alone. There may be a variety of loans types to choose from even though all are programs of that specific lender.
A mortgage banker (also known as an "account executive" or "loan representative") acts on behalf of the borrower to the lender. A loan officer can guide you through the selection, processing and loan closing. Loan officers can be paid a commission or salary for their work by their employers.