Know what to expect: Mortgage Brokers and Loan Officers
When you're looking to get a mortgage loan, you should know the difference between a mortgage broker and a loan officer. People can confuse them since both will glean the same result: a new home. But for your application process, it can help if you know their differences.
A mortgage broker is a person or firm that is an independent agent for the mortgage loan applicant as well as the lender. A mortgage broker coordinates things for you and your lender, which can be one of the following: a bank, trust company, credit union, mortgage corporation, finance company or even a private 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, private investor. You use a mortgage broker to look at your financial situation and lead you to the lender who has the best mortgage loan for you. You give your mortgage application to your broker, who submits it to one or more lenders. Your mortgage broker then assists your work with the lender chosen until closing. The borrower gives a commission to the broker upon closing.
What is a Loan Officer?
The main difference between a mortgage broker and a loan officer is that the latter works on behalf of a lending institution (a bank, credit union, or others) to market and process loans solely originated from the programs of that institution. They may be able to market loans to fit many different situations, but all the loans are products of the same lender.
Your loan officer will represent you to the bank or other lending institution. The loan officer will walk the borrower through the selection, processing and closing of the loan. Either a salary or commission is given to loan officers by their employers.