Broker vs. Loan Officer: What’s the Difference?
You may hear the two terms, and you may use them interchangeably as people often confuse the two job types. Both loan officers and mortgage brokers will help to achieve the same result i.e. a new home, but their jobs are slightly different (but the same). It is important to understand the difference between the two job titles so that you will know what to expect during the mortgage application process.
Mortgage Broker:
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. They 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. He/She will analyze your financial situation to determine which lender is the best fit for your loan needs. Brokers will submit your mortgage application to one or more lenders in order to find the “best fit”, and they will work with the chosen lender until the loan closes. He or she receives a commission only if the loan closes. Mortgage brokers have access to “wholesale” rates and sometimes have access to more products than “retail” lending institutions.
Loan Officer:
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. If you go to Wells Fargo, Wells Fargo will originate and most likely service your loan.
