Mortgage Broker and Mortgage Banker

When you're looking to get a mortgage , you may work with a loan officer or you may choose to work with a mortgage broker. People often confuse the two since both will give the same result: a new home. But as you begin the application process, it can benefit you if you know their differences.

What is a Mortgage Broker?

A mortgage broker is an individual or company that is an independent agent for the mortgage loan borrower as well as the lender. Your mortgage broker will stand as facilitator 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 partner with a mortgage broker to review your financial circumstance and lead you to the lender who has the right mortgage loan for you. You give your mortgage loan application to your broker, who presents it to one or more lenders. Your mortgage broker then helps you work with the lender chosen until the closing of the loan. Upon closing, the broker's commission is given by the borrower.

About Loan Officers

Lending Institutions (banks, finance companies, and others) employ loan officers to offer, and process loans solely originated by that particular institution. There may be a wide range of loans types to draw from, but all are products of that specific lending institution.

A loan officer (also known as an "account executive" or "loan representative") represents the borrower to the lending institution. From choosing a loan product to closing, a loan officer can guide you through the process. Lenders compensate their loan officers with a commission or salary.