Getting a mortgage loan is not a simple task. Whether you’re buying or refinancing a home, the mortgage process involves navigating a path lined with paperwork and rules, and it can be confusing.
Enter mortgage officers. A mortgage loan officer is a professional whose sole purpose is to help consumers in the housing market obtain financing for their homes, says Carolyn Morganbesser, assistant vice president of mortgage originations at Affinity Federal Credit Union. Here’s everything you need to know about what mortgage loan officers do and how you can find one to help you.
What is a mortgage loan officer?
Mortgage loan officers work for financial institutions such as banks and credit unions. They know the various loan products, industry regulations and what’s required to get a particular loan, says Durriya Pierce, certified financial planner and financial advice expert at Albert, the personal finance app.
A loan officer can help you figure out what kind of credit or loan you need and can get, then coordinate with your realtor and lender through the application process, says James Call, loan officer. senior credit at Guild Mortgage Co.
You can work with a mortgage loan officer if you are applying for a new mortgage or trying to refinance an existing mortgage.
“Mortgage loan officers must be licensed or registered depending on the type of lender they work for,” says Call.
Mortgage loan officers may receive a fixed salary or a commission based on a percentage of the loan amount, Pierce explains. Their salary cannot be based on the terms of the loan, according to federal regulations.
What does a mortgage loan officer do?
You can generally expect a loan officer to help you with most of the key steps in getting a mortgage. “The loan officer takes or initiates the initial loan application, determines the options available to the borrower, or advises the borrower on necessary corrective action if credit is not available,” Call explains.
You can also expect a loan officer to be in constant contact with you, updating you on demand and how it’s progressing, says Morganbesser. The loan officer will also help gather the necessary loan documents and work with the title company or escrow service to complete the sale of the home, Call says.
What is the difference between a mortgage broker and a loan officer?
Mortgage brokers and loan officers can be mortgage originators, which means both can help you through the mortgage process, according to Rocket Mortgage.
But they are not the same. “The main difference is that a mortgage broker doesn’t work for just one lending institution,” says Gregory Harmon, assistant professor of banking and finance at Case Western Reserve University’s Weatherhead School of Management. “A broker works for a mortgage brokerage and is able to offer loans from multiple lenders, just as an insurance broker can offer products from multiple insurers.”
Mortgage brokers may be able to access more competitive rates than mortgage loan officers because they’re not tied to any particular institution, Pierce says. But in practice, this is not always the case.
“The broker can find the best lender for the applicant based on the borrower’s specific situation — at least in theory,” Call says. “In reality, some brokers may only work with a few lenders, and loan officers may ‘negotiate’ loans that their lender can handle.”
How to Find a Mortgage Agent
One way to find a mortgage loan officer is through your primary banking institution. As an existing customer, you might even qualify for rate or fee reductions if you use your bank to take out a mortgage. The website or local branch of your bank or credit union can provide information about mortgage loan officers in your area.
“Many mortgage agents are found through referrals from a real estate agent, friend or family member, or through an Internet search for mortgage companies,” says Dan Holtz, Founder and CEO of mortgage company Sovereign Lending Group.
You can also get a good recommendation from a title company. Closers know which lenders and loan officers are closing transactions on time and which are the least stressful to work with, Call says. He recommends researching the lender or mortgage company you want to use, then finding loan officers who work for that company.
“The best advice is to shop around with multiple lenders and don’t be afraid to ask for a discount,” says Harmon. “Make them earn your business.”
Just be aware that there are good and bad loan officers in every business, Call says. So be sure to speak with the loan officer before agreeing to use the services.
You can also verify a mortgage agent’s credentials by entering their license number on Consumer Access to NMLS.
“A home loan is a major investment,” says Holtz. “It’s important that you find a loan officer you can trust.”