Did you know there’s different types of loan officers? Yes, there sure are! Do the words, depository, lender, and broker mean anything to you?  Maybe they do, but do they mean anything to you in connection to a home mortgage? Probably not. Lets explore depository, lender, and broker loan officer differences and what that can mean for your mortgage experience.

Depository, Lender, and Broker Loan Officer Differences

  • Depository Loan Officer – Depository loan officer represent the majority of loan officers in the nation (and Seattle). These are loan officers you find at a depository institution, that being your Bank of America’s, Wells Fargo’s, and local credit unions. When they take a loan application, they will also usually be the servicer of the loan – that meaning that they will lend you the money and not sell your mortgage to another bank. Depository loan officers will likely give you the least meaningful experience with the exception of loan officers at local credit unions.
  • Lender Loan Officer – Lender loan officers are usually state licensed and are the most involved. They work for a bank that specializes in mortgage loans (no checking and investments). These loan officers usually work for their business and do not have walk-in business. They rely on high-quality transactions to ensure they get referral business. Depending on the size of their bank they may service the loan or broker the loan (sell it to another bank). Lender loan officers will likely give you the most meaningful experience as they rely heavily on their reputation.
  • Broker Loan Officer – Broker loan officers are usually state licensed and usually do mortgages on behalf of another bank. They are something of a hybrid between a depository loan officer and lender loan officer. They have to market and attract business, but usually aren’t paid as well as loan officers who work for lenders.

Advantages of Each Loan Officer

  • Depository Loan Officer – These loan officers are usually the easiest to find. You aren’t have a bank account, so you will find these loan officers in your local bank branch. The will provide competitive rates and you get the ease of having a mortgage where you do your banking. A unified financial experience.
  • Lender Loan Officer – These loan officers you’ve probably heard about from a friend or coworker. They had a great (or terrible) experience and want to tell you about it. These loan officers will work hard for you to have the best experience. They will provide you multiple mortgage options, competitive rates, and will usually be good communicators. Their reputation is important to them, so they will give a borrower a good experience to protect their business.
  • Broker Loan Officer -These loan officers are equally good and will work hard to provide you a quality experience. Their communication style will be closer to that of a lender, but they will be able to provide you rates and options at the depository level.

Disadvantages of Each Loan Officer

  • Depository Loan Officer – These loan officers rely on walk-in business, they do not hustle to find new business. In most cases, you will work with a loan officer in a branch but they will send your application off to another loan officer in a larger corporate office. You will not get a personal experience with a depository loan officer and they will not be able to make exceptions to your situation. The only exception to this is a credit union loan officer. Credit union loan officers are usually licensed federally, making them a depository loan officer, but they will be able to provide you a better customer service experience.
  • Lender Loan Officer – These loan officers may not have the support team to get things done in a timely manner and may be too busy to communicate with you. In this case, you’re working with a single loan officer and usually not an entire company. If there’s a problem, you would call this loan officer and not a branch.
  • Broker Loan Officer – Similar to the lender loan officer, these broker loan officers may not have the support team to properly keep you informed. If something goes wrong you have a single point of contact, not a branch or corporate office you can call.

Final Thoughts

If is critical for a borrower to shop around for a mortgage before choosing a lender. Each depository, lender, and broker loan officer has differences and will serve a borrower in different ways. Many people like the security of getting a loan from their bank where they do their checking and savings. But if you have a good experience with a lender or broker, you likely won’t consider getting a mortgage from a depository institution again. Learn about loan officers in Seattle and the surrounding area by checking our our reviews!