Mortgage Broker and Loan Officer

When it's time to find a mortgage loan, you should know the difference between a mortgage broker and a loan officer. People sometimes confuse the two since both will give the same result: a new home. Yet it is helpful to recognize how they differ so you know what to expect from them during the mortgage application process.

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. 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 use a mortgage broker to consider your financial situation and find the lender who has the right loan for you. From application to closing, your mortgage broker facilitates your loan process: offering your mortgage application to several lenders, and walking you with the chosen lender through to the closing of the loan. The borrower pays a commission to the broker at closing.

What is a Loan Officer?

The biggest 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 promote and process loans only originated from that institution. While a loan officer may promote quite a range of loans, they are all programs of that lender alone.

Also called a "loan representative" or "account executive," a loan officer acts of behalf of the borrower to the lender. From selecting a loan to closing, a loan officer will help a borrower through the process. Either a salary or commission is paid to loan officers by their employers.

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