Know what to expect: Mortgage Brokers vs. Loan Officers

When you need a mortgage loan, you may work with a loan officer or you may choose to work with a mortgage broker. Because a new home is the result of the work of both mortgage broker and loan officer, it's common to confuse the two job types. However, recognizing how they differ will be important to your mortgage loan process.

Mortgage Brokers

A mortgage broker (either a group or an individual) is an independent agent for the mortgage loan borrower as well as the lender. A mortgage broker coordinates things between you and your lender, which can be one of the following: a credit union, bank, trust company, finance company, mortgage corporation or even an individual 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 an individual investor. Which lender offers the loan that is best for you? A mortgage broker will lead you to the right one. You give your mortgage application to your broker, who submits it to several lenders. Your mortgage broker then helps you work with the lender of choice until the closing of the loan. The borrower pays a commission to the broker at closing.

Loan Officers

Loan officers work for a specific lending institution (such as a bank) who work with mortgages and other loan products for their company alone. Although a loan officer may promote quite a range of loans, they will be programs with that lender alone.

Also known as a "loan representative" or "account executive," a loan officer represents the borrower to the lending institution. From finding a loan product to closing, a loan officer can walk a borrower through the process. Either a salary or commission is paid to loan officers by their employers.

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