Know what to expect: Mortgage Brokers vs. Loan Officers

When you need a mortgage loan, you may work with a loan officer or you may choose to work with a mortgage broker. It's understandable to confuse the two since both will give the same result: a new home. However, it is valuable to understand how they differ so you have clear expectations of them as you enter your mortgage process.

What is a Mortgage Broker?

During the mortgage loan process, an individual or company who is an independent agent for both mortgage loan borrower and lender is a mortgage broker. 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 investor. Which lender offers the loan programs that is right for you? A mortgage broker will help you find the right fit. Your broker will present your loan application to several lenders, and works with the chosen lender until closing. The borrower pays a commission to the broker upon closing.

Mortgage Bankers

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 promote and process loans solely from that institution. While a loan officer may promote quite a variety of loan programs, they all are products with that one lender.

A mortgage banker (also known as an "account executive" or "loan representative") represents the borrower to the lender. From finding a loan program to closing, a mortgage banker will walk the borrower through the process. Mortgage bankers may be paid a commission or salary for their services by their employers.

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