Correspondent Mortgage Lender/Broker vs. Bank 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 lender/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 lender/broker is an individual or firm that acts as an independent agent for both the borrower and the lender of a mortgage loan.

Mortgage lender/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 lender/broker will analyze your financial situation to determine which lender 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 does not receives a commission until the loan closes which usually comes from the ultimate investor or lender. Total out of pocket costs to the borrower are comparable to going to a bank directly.

A loan officer of a lending institution, such as a bank, works to originate mortgages and other loans originated by that company.  Also known as a loan representative or customer service representative, loan officers represent the borrower to the lending institution and will guide him or her through the processing of the mortgage loan.  Unfortunatley, they often have less variety of loan programs and types, since they are only drawing from that specific bank. Loan officers can be paid a salary usually with bonus or commission for their jobs. 

So the major differences are that the mortgage lender/broker have the ABILITY to shop many, many lenders and banks to find programs that are better then you could find on your own.