Mortgage Broker vs. Loan Officer: What's the Difference?

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Very often, homebuyers do not understand the difference between a mortgage broker and a loan officer. A loan officer works directly for a lender while a broker is an independent party that does not work for anyone. In this way a broker can seek out loans from many different parties.

What is a Loan Officer?

A loan officer works directly for a bank or other lender; therefore a loan officer often considers the best interest of their employer, not the homebuyer. A loan officer is not required to have a license to work in the mortgage industry.

What is a Mortgage Broker?

A mortgage broker, on the other hand, must be licensed. They are an independent worker that acts as the “middle man” between the homebuyer and the lender. Mortgage brokers are recommended for homebuyers with poor credit or those wanting to negotiate the best terms on their loan. Mortgage brokers do not get paid unless they close on a mortgage; therefore, they will work diligently to provide the borrower with a satisfactory loan.

Should I Work with a Loan Officer or a Mortgage Broker?

One benefit of working with a loan officer is that there is no “middle man.” This often results in a speedier loan process because documents do not have to pass through an extra source. Mortgage brokers, however, can provide more mortgage options for borrowers because they are not tied to a single lender.