Mortgage Broker vs. Loan Officer

When you apply for a mortgage loan, you need to know the difference between a loan officer and a mortgage broker. Since a new home is the outcome of the work of both mortgage broker and loan officer, it's common to confuse the two job types. However, knowing the differences between them is beneficial to the mortgage loan process.

About Mortgage Brokers

During the mortgage loan process, an individual or group who is an independent agent for the mortgage loan applicant as well as the 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 a private investor. A mortgage broker will review your finances to determine which lender is the right fit for you. Your broker will submit your mortgage application to various lenders, and works with the chosen lender until the loan closes. If the loan closes, the broker's commission is given by the borrower.

What is a Loan Officer?

The most important difference between a mortgage broker and a loan officer is that a loan officer works for a lending institution (a bank, credit union, or others) to process loans solely from that institution. Although a loan officer may offer quite a range of loan programs, they are all products with that lender alone.

Also called a "loan representative" or "account executive," a loan officer acts of behalf of the borrower to the lender. A loan officer can guide the borrower through the application, processing and loan closing. Loan officers are compensated with a commission or salary for their services by their employers.