Mortgage Broker vs. Loan Officer

When you're looking for 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.

A Mortgage Broker works with a Brokerage Business, or Mortgage Lender and acts as an independent agent for both the borrower and the lender of a mortgage loan.  In Florida, Brokers are required to attend a pre-licensing class at an approved school and pass not only the test for the school but also the state and national test.  They are required to maintain continuing education which is required by the state in order to keep their license. 

Mortgage brokers are the middle man between you and the lending institutions, which can be a variety of banks, trust companies, credit unions, mortgage corporations, finance companies and even private investors.  A mortgage broker will analyze your financial situation and determine which lenders best fits for your loan needs, and determine which one has the lowest rate.  They will submit your mortgage application to your choosen lender, and work with them until the loan closes.  They receives a commission from the borrower, the lender, or both only when the loan closes.  Brokers should show you the rate sheets from the various lenders and explain how they may be paid when you begin working with them.  They will also provide guidance and full explanation of programs and allow you to make the final decision on the lender and rate you receive.  If one lender turns your file down, they simple take your loan package and submit it to another lender, usually taking only the time it takes to scan the package. 

A Loan Officer is a representative of a lending institution, such as a bank, who works to sell and process mortgages and other loans originated by their employer.  They often have a wide variety of loans types to draw from, but all originate from that specific lender, leaving you one lender to choose from.  If you do not fit into their lending guidelines, you have to start the entire process over by going to another bank. 

Also known as a loan representative or account executive, loan officers represent one lending institution and will guide the borrower through the selection, processing and closing of mortgage loan. Loan officers can be paid a commission or salary, or both for their services.