Know what to expect: Mortgage Brokers vs. Loan Officers

When you apply for a mortgage loan, you may work with a loan officer or you may choose to work with a mortgage broker. As a new home is the outcome of the work of both mortgage broker and loan officer, people frequently confuse the two job types. Yet understanding how they differ is useful to the mortgage process.

About Mortgage Brokers

A mortgage broker is an individual or company that is an independent agent for the mortgage loan applicant as well as the lender. Your mortgage broker will stand as coordinator between you and the lending institution; which may be a bank, trust company, credit union, mortgage corporation, finance company or even an individual, private investor. You partner with a mortgage broker to consider your financial situation and lead you to the lender who has the best loan for you. From application to closing, your mortgage broker facilitates the loan process: submitting your loan application to several lenders, and walking you with the chosen lender through to the closing of your loan. The borrower submits a commission to the broker at closing.

Loan Officers

The main difference between a mortgage broker and a mortgage banker is that the latter works for a lending institution (a bank, credit union, or others) to promote and process loans only from the programs of that institution. There can be an assortment of loans types to draw from, but all are programs of that specific lending institution.

Also called a "loan representative" or "account executive," a mortgage banker represents the borrower to the lender. A mortgage banker can help you through the application, processing and loan closing. Lending institutions pay their loan officers a commission or salary.

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