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Jeremiah Clay

The types of home loan officers, explained

Updated: Jul 17


Chances are you will need a mortgage to help finance purchaing your new home. According to the National Association of Realtors, 78% of all recent homebuyers financed their home purchase with a home loan.


With so many lenders available, choosing a loan officer can be challenging. And you might be surprised to learn there are various types of lenders that offer different levels of service.


In general, if you’re looking for a more traditional financing experience, going with a loan officer is probably a safe bet. On the other hand, if your financial situation is a bit more complex (such as if you have a weak credit history or are self-employed), using a mortgage broker or mortgage banker can get you access to more flexible mortgage solutions that might serve your situation better.  


Comparing types of mortgage lenders


The lender you choose can have a major impact on your home buying experience and how much you pay for your home over time.


Let’s break down three types of mortgage professionals to consider when shopping for a new mortgage: loan officers, mortgage bankers, and mortgage brokers.


Loan officers


Loan officers are one of the most common types of lenders. Most are employed by a financial institution, such as a bank or credit union, or a mortgage company. These professionals work as an intermediary between you and the institution’s underwriting department to help you qualify for a home loan. They will also assist with the closing process.


Loan officers can typically offer a variety of mortgage solutions but can be limited by what products their company offers—although you can often consolidate your financial needs under one roof.


They can also offer rate and fee combinations to build a mortgage solution that works best for you.


Mortgage bankers


Unlike a traditional loan officer, mortgage bankers complete the entire mortgage process from start to finish. This includes taking your initial application, underwriting and approving your loan, and walking you through the closing process.


Mortgage bankers lend money directly or will seek the money from another bank, which means they have the power to shop around and get you the best solution possible. They might be an individual or work under the umbrella of a mortgage banking firm. 


Since mortgage bankers can offer a variety of products, they are a great choice if you have a complex situation and need the help of a professional with extensive industry experience.


Mortgage brokers


If you’re looking for the best deal and want more financing options, you can’t go wrong using a mortgage broker. Mortgage brokers are lenders who shop around and partner with different companies on your behalf to offer you a wider range of mortgage solutions.


Mortgage brokers are different from mortgage bankers in that they do not directly lend you money, nor do they approve your loan application. Rather, they collect your information and send it to the best lenders that can help you qualify for the type of solution you are looking for.


Much like a loan officer, they act as the intermediary between you and the mortgage company, but they are not limited to a strict pool of products from any one company, making them extremely flexible.


How to choose the right lender


Choosing the right mortgage lender isn’t always black-and-white—each type has advantages and disadvantages. The best way to choose is to shop around.


Start a conversation with multiple candidates to get a feel for their process and identify the type of user experience you are looking for. Make sure to get quotes and compare them side-by-side for differences in their service charges and rates. 

 

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