Know the difference: Mortgage Brokers vs. Loan Officers

When it comes to locating a mortgage loan, you need to know the difference between a loan officer and a mortgage broker. As both a mortgage broker and lending officer will help you fund your new home, it's common to confuse them. Yet recognizing how they are different will be useful to the mortgage loan process.

Mortgage Brokers

A mortgage broker (either a firm or an individual) is an independent agent for both the mortgage loan borrower and the lender. Your mortgage broker will stand as facilitate between you and the lending institution; which may be a credit union, bank, trust company, finance company, mortgage corporation or even a private investor. You work with a mortgage broker to examine your financial circumstance and find the lender who has the right loan for you. You give your application to your broker, who presents it to a number of lenders. Your mortgage broker then helps you work with the lender of choice until closing. The borrower pays a commission to the broker upon closing.

Loan Officers

Loan officers are representatives of a particular lending institution (such as a bank) who offer and process mortgages and other loan products originated by their place of employment alone. There may be a wide variety of loans types to choose from, but all are programs of that specific lending institution.

Also known as 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 can walk you through the process. Lending institutions pay their loan officers a salary or commission.

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