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  • "Get the best mortgage loan for you"

Mortgage Broker vs. Loan Officer

When you're looking to get a mortgage loan, you may work with a loan officer or you may choose to work with a mortgage broker. People often confuse the two job types even though both will glean the same results: a new home. However, it is important to understand the difference between the two types of jobs so you know what to expect from them during the mortgage application process.

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A mortgage broker is an individual or firm that acts as an independent agent for both the borrower and the lender of a mortgage loan.

Mortgage brokers are the middle man between you and the lending institution, which can be a bank, trust company, credit union, mortgage corporation, finance company or even an individual private investor. A mortgage broker will analyze your financial situation to determine which lender is the best fit for your loan needs. He or she will submit your mortgage application to one or more lenders in order to sell it, and works with the chosen lender until the loan closes. He or she receives a commission from lenders or from the borrower if the loan closes.

A loan officer is a representative of a lending institution, such as a bank or a mortgage broker who works to sell and process mortgages. They often have a wide variety of loans types to draw from, but all originate from that specific lender. Loan officers can also be paid a commission or salary for their services. Mortgage broker gets a wholesale rate from lending institutions, offers customers a retail rate, what is why people come to brokers get better deals and professional services. Why should customers choose broker over bank? Bank's loan officers offer customer a retail rate too, and most likely a higher rate since bank has higher costs (good location of office, retirement, benefits, etc). Plus a lot of customers might think they cut middleman off deal since they have chcking or saving accounts with the bank. Customers may get higher rate and cost at the closing table because brokers help customers to get best deals from many lenders. Just as the same reason, deals from a direct lender may be no better than from a broker. Lenders are selling almost all loans to mortgage back securities any way.