Know the difference: Mortgage Brokers and Mortgage Bankers

Either a mortgage broker or a loan officer may help you when you work on your application for a mortgage loan. People can confuse these as both will produce the same outcome: a new home. However, it will be helpful to recognize the difference between them so you know what to expect from them as you enter your mortgage application process.

Mortgage Brokers

A mortgage broker (either a company or an individual) is an independent agent for both the mortgage loan borrower and 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. A mortgage broker will look at your numbers to find out which lender is the right fit for your loan needs. You give your mortgage loan application to your broker, who offers it to a number of lenders. Your mortgage broker then guides your work with the lender chosen until the closing of the loan. The borrower submits a commission to the broker upon closing.

What is a Loan Officer?

Loan officers represent a specific lending institution (such as a bank) who promote and process mortgages and other loans for their company alone. They may be able to offer loans to fit many different situations, but all the loans will be programs of the same lender.

A loan officer (also known as an "account executive" or "loan representative") represents the borrower to the lender. The borrower is walked through the whole process, from loan selection to closing, by the mortgage banker. Lending institutions compensate the loan officers with a commission or salary.