As you consider where to go and who to work with in securing a mortgage loan it is important for you to know the difference between a mortgage broker and a bank’s loan officer, though many times the titles are used interchangeably. Both jobs are often confused even though the end result is a purchase or refinance loan for a home. The importance of understanding the difference between the two jobs allows you know what to expect during your mortgage application process.

A mortgage broker is an individual or firm that acts as an independent agent for both the borrower and potential lenders. In other words mortgage brokers are the middle man between you and the lending institution, which can be one of several banks, trust companies, credit unions, mortgage corporations, finance companies or even individual private investors. A mortgage broker’s role is to analyze your financial situation to determine which of many lenders 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. They then work with the chosen lender until the loan closes. The mortgage broker receives a commission, typically written into the loan, from the borrower when the loan closes. The advantage of the mortgage broker, like Flagship Financial, rests in the relationships they have with a large number of lenders which gives them the opportunity to find the best loan in the marketplace for the borrower.

A loan officer is a representative of a specific lending institution, such as a bank. They work to sell and process mortgages and other loans originated by their specific employer. They often have a wide variety of loans types to draw from, but all originate from that specific lender. Also known as a loan representative or account executive, loan officers represent the borrower to their lending institution and will guide them through the selection, processing, and closing of their loan. These loan officers can be paid a commission, salary, or combination for their services.