Know the difference: Mortgage Brokers vs. Loan Officers

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Either a Pa mortgage broker like Net Equity Financial or a Pa loan officer can help you when it's time to find a mortgage. Because a new home is the result of the work of both mortgage broker and loan officer, it's understandable to confuse the two job types. Yet understanding how they are different is advantageous to your mortgage process.

What is a Mortgage Broker?

A mortgage broker (either a group or an individual) is an independent Pennsylvania licensed agent for both the mortgage applicant and the lender. Your Pa mortgage broker will facilitate between you and the lending institution; which can be a bank, trust company, credit union, mortgage corporation, finance company or even a private investor. Whichever lender has the loan that best fits your financial situation? A licensed Pennsylvania mortgage broker will help you find the best one. You give your mortgage application to your broker, who presents a loan package to many lenders. Your Pa mortgage broker then assists your work with the lender chosen until the loan closes. At closing, the broker's commission is paid by the borrower or the lender, depending upon how the file was structured. Usually this option results in more favorable terms to the borrower since the loan has been "shopped" to a number of different lending sources.

What is a Loan Officer?

Loan officers are representatives of a specific lending institution (such as a bank) who process mortgages and other products for their company alone. They may have the ability to promote products to fit many different situations, but all are products of the same lender, which can sometimes be a negative. Imagine shopping at the grocery store that has one brand of ketchup. Take it or leave it.

Your loan officer represents you to the bank or other lending institution. From choosing a product to closing, a loan officer will help the borrower through the process. Either a salary or commission is given to them by their employers.

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