If you’re in the market for a new home loan or to refinance, it’s important to distinguish between a mortgage lender and a mortgage broker.

Loan officers at a mortgage broker (like Indigo Mortgage) actually work for the borrower, while loan officers from a mortgage lender represent the bank. If you’re applying for a mortgage through your credit union, bank or online mortgage company, your contact is a mortgage lender who is representing just that one company.

There is a huge difference between the two, a mortgage broker versus a mortgage lender. How can a loan officer represent their bank and represent the borrower at the same time? It becomes a conflict of interest. As a mortgage broker, our loan officers are always on the same side of the fence with the borrower, they process their loans locally and then send it to any number of banks to fund the loan. Brokers do not represent the banks they represent the borrower.

Many times a broker can fight underwriting guidelines in favor of the borrower. This is not possible for a loan officer at a bank as their first loyalty is always with the bank.

Another key difference is that mortgage brokers always shop the rate around to various lenders, assuring the borrower the lowest rates on the market. Loan officers from credit unions and banks do not have this option and must give the rate published by their financial institution– and that is most likely not the best rates and terms available for the borrower. Competition is good—it allows the borrower to see the best mortgage rate and lowest fees that they qualify for.

If you don’t know if your loan officer works for a bank, just ask them if they shopped the mortgage around, or do they work only for their company. Mortgage brokers are better. To get a competitive offer on your mortgage or refinance, call Indigo Mortgage today and see what shopping your mortgage can save you over the life of your home loan.