How Does LendingTree Get Paid? LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.
Whether you are looking for a personal, business, auto, or mortgage loan, a loan officer is typically the first person you will speak with. But since a mortgage is typically one of the most intricate and costly loans that a consumer takes out, the federal government mandates that mortgage loan officers complete a rigorous licensing renewal process each year and continue to receive ongoing education.
Find out what a mortgage loan officer does, how they operate, and how to select the most qualified individual to give you advice on home loans.
On this page
What is a loan officer?
A loan officer is in charge of providing guidance, support, and the documentation required to finish a loan application. Working for a mortgage lender, a mortgage loan officer focuses on loans for residential properties. They must be knowledgeable about the requirements for approval for each type of mortgage loan product.
Mortgage loan officers receive training on how to select the best loan program by analyzing your income, down payment, and credit history. Many also learn the fundamentals of financial markets so they can lock in your mortgage rate at the right moment to shield you from the ups and downs of the economy.
Read more about our current mortgage rates forecast.
What does a loan officer do?
A loan officer’s job description varies from lender to lender. However, most mortgage loan officers perform the following six tasks:
- Vet the information on your loan application. The nine sections of the Uniform Residential Loan Application (URLA) form include numerous questions regarding every facet of your financial history and present. It is the loan officer’s duty to identify any discrepancies or unanswered questions in order to prevent the mortgage process from being delayed.
- based on your loan application, advise you on the appropriate program. A loan officer must abide by fair lending laws in order to recommend a loan program, interest rate, and closing costs that fit your budget because they are both an advocate and an advisor.
- Before the closing date, submit a thorough breakdown of fees following your initial application. In order for you to be aware of your fees at the start and finish of the transaction, loan officers are required to provide you with a loan estimate three business days after you apply for a loan and a closing disclosure three business days prior to closing.
- Collect documents to support your loan request. Whether it’s tax returns for self-employed borrowers or letters of explanation for homebuyers with credit imperfections, a knowledgeable loan officer knows what paperwork to ask for to expedite and increase your chances of approval.
- Help you negotiate the best mortgage program terms. An expert in lending guidelines, closing costs, and interest rates for a broad range of loan programs is possessed by an experienced mortgage loan officer. They respond to inquiries regarding various mortgage options and provide justification for why their suggestion is a good fit for you.
- Track deadlines and help you close your loan. When you purchase a home, loan officers monitor significant dates to make sure your loan closes on schedule. Additionally, they keep an eye out for the expiration date of your mortgage rate lock, saving you money on extensions and relock fees.
Your loan officer and real estate agent work together when you buy a home> It’s pretty common for real estate agents to refer their customers to loan officers they’ve worked with before. Communication is critical: A missed deadline could cause a seller to cancel a contract or cost you money if you have to extend your rate lock or closing date.
Regular updates on mortgage processing should be sent to your real estate agent by a professional loan officer. A good real estate agent will monitor contract deadlines and notify your loan officer of any modifications to the terms of the sale, such as seller-paid repairs or closing cost credits.
Mortgage broker vs. loan officer: What’s the difference?
A financial service provider with a license who represents several lenders is known as a mortgage broker. They serve as a go-between for the borrower and various lenders to locate the most advantageous loan options and interest rates. The mortgage brokerage company doesn’t actually provide the loans, however.
A loan officer usually only works for the products that their hiring lender offers because they are employed by one lender. Their employer may be a mortgage bank, credit union, or institutional bank, and they may supply mortgage funds to borrowers directly.
Unless you ask, you might not be aware of the kind of lender you are dealing with. If you don’t fit into the typical cookie-cutter loan guideline box, have complicated tax returns, or have inconsistent credit, your best option is to work with a mortgage broker. For borrowers who have narrowed down their lender options or who require assistance with a down payment, a loan officer is a good fit.
How do I pick the best mortgage loan officer near me?
There are numerous methods for selecting a loan officer to fulfill your mortgage requirements. Here are eight suggestions to help streamline the process before you begin your search.
Ask a friend or family member
Ask a friend who recently purchased a home and had a positive loan experience to give you the name and phone number of the loan officer.
Use an online lender
Many lenders provide websites with information on mortgages and buying a home, so familiarize yourself with some of the lingo. Most provide a link for an online mortgage application; after completing it, you’ll be contacted by a loan officer.
Learn more about our picks for the best online mortgage lenders.
Get a referral from your real estate agent
Real estate brokers frequently collaborate with “preferred” loan officers who have a track record of promptly closing loans. Before showing properties, some real estate firms have an internal loan officer stationed in their offices to prequalify their buyers.
Ask a housing counselor
Check the U.S. Department of Housing and Urban Development’s (HUD) website for a list of housing counselors in your area. HUD-certified counselors may be able to recommend a local reputable lender.
Go to your local bank
The majority of banks provide home loans, and if you maintain a sizable amount of cash on deposit, some even offer reduced interest rates. Since loan officers typically work in bank branches, you can easily meet them while conducting your daily banking.
Find a local mortgage bank or mortgage broker
There are probably a ton of mortgage company and loan officer websites available if you Google “mortgage banks near me” or “mortgage brokers in my area.” For those with particular credit or income challenges, mortgage brokers may even have access to special non-qualified mortgage programs.
Have questions prepared for each loan officer you meet
Have a list of questions ready to gauge the loan officer’s experience and knowledge in addition to the obvious ones about obtaining the best rates and fees. You’ll learn a lot about the loan officer by asking:
- How much experience do you have? If you have complicated tax returns or a difficult credit history, a loan officer with years of experience can be a great ally. They are skilled at managing the correspondence between all parties involved in your loan closing to guarantee a seamless transaction.
- What are your working hours? Often, homebuyers view properties on the weekends and after work. If you live in an area where real estate is booming, you should find an accessible loan officer. Most sellers won’t even consider a purchase offer without a preapproval attached, so you might need an after-hours mortgage preapproval to compete.
- During the loan process, how will we communicate? Emails and texts are excellent for providing brief updates on our progress. However, if you have any urgent questions or need to discuss your mortgage, loan officers should be reachable by phone.
- Look for reasons why I should choose your business beyond affordable prices, excellent service, and competitive rates. If there is intense competition, special features like 14-day closings, rate locks before you’ve found a house, or special down payment assistance programs may give you an advantage over other buyers.
Meet at least three to five different loan officers
According to LendingTree research, borrowers can save thousands of dollars on their loan costs by shopping around with at least three to five mortgage lenders. However, since you will be working with the loan officer for a month or two, make sure you get along with them.
A mortgage loan originator, or MLO for short, is the regulatory name for a loan officer. You can check a loan officer’s license status by entering their six-digit NMLS number into the Nationwide Mortgage Licensing System (NMLS) consumer access site.
According to federal law, lenders must compensate loan officers for their services with a fixed fee or a predetermined percentage of the loan amount. Loan officers are not permitted to charge more depending on the loan’s terms, such as interest rate or kind of loan. The bottom line: If a loan isn’t in your best financial interest, it’s against the law for them to recommend it to you in order to increase their commission.
A business that normally provides mortgage products for a single lender is known as a mortgage banker. Since they give you the money “directly” as opposed to a mortgage broker who doesn’t give any money at all, they are frequently referred to as direct lenders. The complete loan procedure is typically managed internally, from application to funding. Underwriters for mortgage banks frequently possess unique powers to authorize loans that mortgage brokers or institutional banks are unable to.
Any person who assists you in getting a loan may be referred to as a loan officer. A loan officer can assist you with a personal, student, boat, or auto loan. A mortgage officer deals exclusively with home loans.
Discover the various mortgage loan options, including government-backed FHA, VA, and USDA loans, in addition to conventional loans, to help you make the best decision.
We’ll go over extras you might not have thought about if you’ve ever wondered what the advantages of home ownership are.
Having a thorough checklist when house hunting could mean the difference between getting the house you want and losing out to a more prepared buyer.
FAQ
What are the duties of a loan officer?
Loan officers determine whether applicants are eligible for loans through a procedure known as underwriting. Loan officers examine the data to ascertain whether an applicant is in need of a loan and has the capacity to repay it after gathering and confirming all necessary financial documentation.
What is the difference between a lender and a loan officer?
Mortgage Lender: Directly lend money to borrowers. A mortgage lender’s loan officers are employed by the lending company and can only offer loans that the company offers.
Why do loan officers quit?
A loan officer might work as a project coordinator, an instructor, and the chief marketing officer on a typical day. One of the few reasons loan officers burn out and look for other career options is that they are trying to do too much, are not taking time off from work, or are using outdated technology.
Read More :
https://www.bls.gov/ooh/business-and-financial/loan-officers.htm
https://www.lendingtree.com/home/mortgage/what-is-a-loan-officer/