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.

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. In the State of Florida all Mortgage Brokers must be licensed with the Florida Dept of Financial Regulations.

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 and provide you with several loan packages, including fixed or adjustable interest rates and various payment options for you to determine which lender's program 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 the borrower or a pre-disclosed premium (YSP) from the lender if the loan closes.

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 only by their employer. They often have a smaller variety of loans types to draw from, but all originate only from that specific lender.

Also known as a loan representative or account executive, loan officers represent the borrower to the lending institution and will guide him or her through the selection, processing and closing of mortgage loan. Loan officers can be paid a commission or salary for their services. In Florida, anyone can become a loan officer and does NOT need to participate in mortgage education or be licensed as such.