Know the difference: Mortgage Brokers vs. Loan Officers

When it comes to getting a mortgage loan, you may work with a mortgage banker or you may choose to work with a mortgage broker. Because both give the same result (a new home), it's common to confuse the two job types. Yet recognizing how they are different will be advantageous to the mortgage process.

What is a Mortgage Broker?

A mortgage broker (either a firm or an individual) is an independent agent for both the mortgage loan applicant and the lender. Your mortgage broker will stand as facilitator 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 loans that is right for you? A mortgage broker will help you find the right one. From application to closing, your mortgage broker works with you: submitting your application to several lenders, and coordinating the process with the lender through to closing. The broker is given a commission from the borrower at closing.

What is a Mortgage Banker?

Mortgage Bankers are representatives of a particular lending institution (such as a bank) who promote and process mortgages and other loans from their place of employment alone. They may be able to offer loans to fit many different situations, but all the loans are products of the same lender.

A loan officer (also called an "account executive" or "loan representative") acts on behalf of the borrower to the lending institution. The borrower is guided through the whole process, from choosing a loan to closing, by the loan officer. Lenders pay their mortgage bankers a salary or commission.

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