What is the difference between a loan originator and a mortgage broker?

The distinction between a loan originator and a mortgage broker lies primarily in the relationship they have with lenders and their roles in the mortgage process. A loan originator is typically employed by a specific lender, which means their primary responsibility is to provide loan products offered by that lender. They assist borrowers in completing loan applications, guiding them through the terms and conditions of the loans specific to their employer. This can create a more focused relationship, given that the loan originator has a vested interest in representing their employer's products.

On the other hand, a mortgage broker serves as an intermediary between borrowers and multiple lenders. Brokers have the ability to shop around for loan products from various lenders to find the best fit for their clients' needs. This flexibility allows them to offer a broader range of options, potentially leading to better rates or terms that align with the borrower's financial situation.

This fundamental difference highlights why the correct answer addresses the nature of their employment and operational scope—loan originators work for a specific lender and mortgage brokers have the capacity to access and work with many lenders. Understanding this distinction helps borrowers know whom they are dealing with and the options available to them during the mortgage process.