Loan Officer Vs Loan Originator

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How To Choose A Mortgage Loan Originator

Loan Originator vs Mortgage Broker? Palm Beach County Realtor, RoQuanda Guy

To find the right mortgage loan originator, Diaz recommends that you start by shopping around and asking questions, since not every MLO will be a good fit. Sometimes we work for a lender or we work for a bank, and our lender doesnt have the program thats the best fit for the client, he says.

Beyond the ability to help you apply for the best loans, both Ellis and Diaz agree that chemistry matters, since you can really benefit from things like a natural connection, comfort in discussing your finances with your MLO, and shared communication styles.

On the other hand, there are some red flags that should prevent you from working with an unscrupulous lender or mortgage loan originator:

  • Independent MLOs who dont have a current license
  • Up-front fees or any fees that are to be paid directly to the agent
  • Pushy or impatient behavior
  • Pressure to sign blank documents or to fabricate information

In addition to falsified documents, Ellis points out that you should be on the lookout for common signs of mortgage fraud, like last minute changes to your wiring instructions. If you receive an urgent email or written communication requesting a wire, it may even be from a fraudster whos impersonating your lending institution. Be sure to call your MLO directly to confirm.

Which One Is Better

When comparing a mortgage broker vs. loan officer, the better option depends on your situation. Mortgage brokers can shop your application around to find the best loan program to fit your needs. But, you may have to pay an extra fee for their services. For most people, the time savings and streamlined application process is worth the extra cost.

When a borrower has an extensive relationship with a bank, their best option may be working with a loan officer from that bank. The loan officer may already be familiar with you as a customer of the bank. And your relationship may qualify you for discounts on interest rates and closing costs. This could save you money compared to other lenders. Additionally, the bank already has access to your bank accounts, so theres less documentation that youll need to provide.

Does A Mortgage Loan Originator Need A License

When you’re taking financial advice from someone, it’s reasonable to want them to be licensed and to be able to trust that they have the know-how to back up what they’re talking about. In the mortgage industry, this can be handled a couple of ways.

Every state has different requirements for mortgage loan officers and brokers. There’s state-level licensing required for someone to be able to originate mortgages. These include certifications or licenses that an individual loan officer must have and licenses that must be maintained by the institution funding the loan.

For nationwide banks, there are federal registrations, but non-bank lenders and local originators will have their MLOs licensed at the state level.

Lenders are also required to comply with the Secure and Fair Enforcement for Mortgage Licensing Act of 2008, or the SAFE Act. This act requires that federal and state licensing for MLOs be published in the Nationwide Mortgage Licensing System and Registry .

The NMLS directory allows clients to check on the licensing and registration details of individual lenders and their MLOs to make sure they’re properly licensed.

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What Is The Cost Estimate For The Loans You Recommend

Another question you may want to ask when determining which loan officer is the right candidate for you is what their cost estimate is for the loan options they recommend. A loan estimate gives you a breakdown of all the costs associated with a loan, including closing costs.

Though the estimates will be based on current interest rates that can change, they can still give you an idea of what you can expect in terms of the cost of the loan. Request these estimates all on the same day so they can be fair, comparable estimates.

Ask questions like these during the interview with a loan officer. The answers a loan officer provides and their willingness to answer your questions will indicate to you whether you want to move forward with your professional relationship with this loan officer.

What You Need To Know

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  • A mortgage loan originator is a person or lending company that works with home buyers and banks to process and secure mortgage loans
  • Mortgage loan originators are typically paid a commission by the lender when a loan closes
  • Your mortgage loan originator will guide you through the entire mortgage application process, from applying to closing

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Occupational Employment And Wage Statistics

The Occupational Employment and Wage Statistics program produces employment and wage estimates annually for over 800 occupations. These estimates are available for the nation as a whole, for individual states, and for metropolitan and nonmetropolitan areas. The link below go to OEWS data maps for employment and wages by state and area.

What Does A Loan Officer Do

A loan officers job description varies from lender to lender. However, most mortgage loan officers are responsible for the following tasks:

Vetting the information on your loan application. The Uniform Residential Loan Application form is divided into nine sections, and its the loan officers responsibility to spot any inconsistencies or missed questions to avoid delays and confusion.

Collecting documents to support your loan request. A good loan officer knows what documents to request whether its tax returns for a self-employed borrower or letters of explanation for credit blemishes to speed up and maximize your odds of approval.

Helping you negotiate the best mortgage program terms based on your finances. An experienced loan officer is well-versed in the guidelines, closing costs and interest rates of a wide variety of loan programs offered by lenders they work for. Theyll answer questions you have about different types of mortgages, and explain why the program theyre recommending is a good fit for you. Theyre also responsible for providing a loan estimate three business days after you apply for a loan, and a closing disclosure three business days before you close.

Tracking deadlines and helping you close your loan. Loan officers track important milestones to ensure you close by your contract closing date when youre buying a home. They also keep an eye on your mortgage rate lock expiration date, so you dont end up paying expensive extension or relock fees.

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Verify Licenses Of Mortgage Lenders Brokers Or Loan Originators

License information for mortgage lenders, brokers, and loan originations can be found using the Nationwide Multi-State Licensing System .

  • NMLS is a free service to confirm that the financial-services company or professional you are working with or plan to work with is authorized to conduct business in their state.
  • The NMLS also contains licensing/registration information on consumer finance, debt and money service companies, branches, and individuals licensed by state and federal regulatory agencies participating in NMLS.
  • Updates to the NMLS are made nightly on business days to ensure the most current information is available.

How And Why Should I Get A Loan Officer

My First Year As A Loan Officer – EXPECTATION VS. REALITY

Chances are, if you decide to go with a bank as your lender, then you’ll be assigned a loan officer. This person is paid by the institution to help you gather all the necessary documents and proof required to not only qualify for the loan but to actually receive it. Many people get pre-qualified for a mortgage loan months and even years before they close on a new home. In the interim, their finances change in ways that may jeopardize their ability to truly receive the loan. Loan officers can be advocates and educators for borrowers, but that’s because their goals are aligned. They want to successfully close on a loan because that’s when they can collect commissions.

Remember, each loan officer works for one specific institution. So if you’re shopping around for a mortgage, you will interact with multiple loan officers. But it may be possible to shift to a new loan officer at the same financial institution if the one you’re initially assigned isn’t responsive or has an abrasive bedside manner.

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Final Word On Loan Officers

To sum it up, loan officers have the potential to make more money than the majority of the population, including doctors and lawyers.

And even pro athletes if their careers are long enough, but financial situations will vary greatly based on sales performance.

The amount of time and work you put in is paramount, and you must be very driven to excel in the mortgage industry. It can be a very cut-throat field, filled with stress, deadlines, and missed opportunities.

After all, were talking about a lot of money and big life moments for the families taking out these loans. So its not to be taken lightly.

The job certainly isnt for everyone, but if you think youve got what it takes, it can be very fruitful and lead to other opportunities, such as being a broker, working with a large banking institution, or working in commercial real estate, just to name a few.

Always do plenty of research about the mortgage company or broker you decide to work for to ensure you know exactly how and what you will be paid, and what is expected of you. Good luck out there!

Should You Work With A Mortgage Broker Or Loan Officer

If this is your first time shopping for a mortgage or you want access to a wide range of options, a mortgage broker is a good option since they arent limited to one lender. If you already know your target lender and are comfortable moving forward on your own, a loan officer will be able to help you.

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Passion For Helping Clients

Becoming a loan officer requires passion for helping clients. You should have a strong customer service mindset, meaning that you put your client first every time. This passion for helping clients will help you to build a good relationship with those youll be serving and a good rapport at your job.

What Is A Real Estate Agent

Kentucky FHA Loans Compared to Kentucky Conventional Loans

A real estate agent is a licensed professional who is responsible for helping people buy or sell homes or property. Real estate agents who work with sellers are typically referred to as listing agents, while those who work with buyers are called buyer’s agents. Many real estate professionals are both buyer’s agents and listing agents, although usually not for the same real estate transaction. Real estate agents typically are compensated based on a percentage of the purchase price of the property.

Read more:Learn About Being a Real Estate Agent

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What Is A Mortgage Loan Originators Salary

A mortgage loan originators salary will depend on several factors, including the company they work for, their level of experience and how many home loans they close per month.

If the MLO is a broker, they may be paid by their clients or by commission from the lender they partner with to close the loan. If the MLO is a loan officer, theyll typically be paid an hourly rate or salary along with a commission earned per loan.

Bring Expertise To Your Loan Process

Among a loan officers skills is expertise in the industry. Loan officers are licensed with the federal and state authorities, and they adhere to the regulations of lending money. Because regulations are so strict, loan officers must be highly knowledgeable about the lending process and the banking industry.

The loan process, especially for mortgages, requires a lot of paperwork. While completing the necessary paperwork, youll likely have several questions. A loan officer can offer their expertise to answer your questions and help you properly fill out the paperwork. Issues with the paperwork can delay the process of applying for a mortgage, so having a lender to guide you can help prevent delays.

When you work with a professional who has comprehensive knowledge about the work theyre doing for you, youll know youre in good hands and making informed decisions about your loan.

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What Is The Average Mortgage Loan Originator Salary

According to the U.S. Bureau of Labor Statistics, the average MLO makes about $63,000 per year. Importantly, however, MLOs do not work on a salary but rather on commission. This means that MLOs working in high-priced cities or markets might take home a lot more money than the average MLO.

This might be changing. Some newer mortgage companies have started transitioning to salary pay for MLOs. The aim of this is to make lending more transparent for borrowers. In a commission-based model, an MLO might work for a larger loan amount that will yield a higher commission, even if that is not in the borrowers best interest.

Other Professional Mortgage Titles

Loan Officer vs Mortgage Broker

There are a plethora of jobs within the mortgage industry, and each position provides vital services to help the mortgage loan process along. While many of these positions are interconnected, each job has its own responsibilities, rules, and regulations.

  • A Loan Officer, often referred to as a Mortgage Loan Officer, works as a representative of a credit union, bank, or other financial institution. They help borrowers through the mortgage application process and will also assist consumers and small business owners with a wide variety of secured and unsecured loans.
  • A mortgage bank is a bank that specializes in originating and/or servicing mortgage loans. In the U.S., a mortgage bank is a state-licensed banking entity that makes mortgage loans and sells them directly to consumers.
  • Mortgage Banker
  • A mortgage banker is an individual, company, or institution that originates mortgages. Whether on behalf of an individual or company, all mortgage bankers function the same. To bankroll mortgages, mortgage bankers use their own funds or funds borrowed from a Warehouse Lender. Once a mortgage is originated, a mortgage banker can retain the mortgage in a portfolio, or they may sell the mortgage to an investor or another financial institution.
  • Mortgage Lender
  • Breaking into the mortgage industry can lead to a rewarding and lucrative career. No matter which path you pursue, The CE Shop has what you need to succeed in your mortgage career!

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    Monitor The Application Process

    The MLO oversees the loan application process and works with the lender on the borrowers behalf. A big part of this job is letting you know if loan processors or underwriters need more information. The aim of all of this work is to steer you and your mortgage application closer and closer to closing day.

    Mortgage loan originators are typically paid commissions from loan origination fees . They are as invested in matching you with the right loan for your financial situation as you are. It decreases the odds of problems or running into delays and increases your chances of getting approved for a mortgage.

    When closing day comes the lender releases the money for your purchase, and you pay the origination fee as part of your closing costs. On average, origination fees are 0.5% 1.0% of the loan amount and go toward an MLOs commission.

    There are national regulations that help ensure MLOs are working in your best interest. According to the Secure and Fair Enforcement for Mortgage Licensing Act, anyone who offers, negotiates and accepts a residential mortgage loan application must be licensed or registered.

    What Is A Loan Processor

    A loan processor works with a loan originator to ensure a borrowers financial profile and resources are a good fit for the mortgage product they select. The mortgage processor will do so by preparing the mortgage application file and other financial documents required for financing. They will deliver all of this information to the mortgage underwriter who decides if a borrowers financials meet the approval criteria.

    Essentially, the loan processors organize all documentations and application information according to the guidelines of the loan the borrower selects. Organizing the documents streamlines the underwriting process, so the underwriter can quickly access the appropriate information and make a speedy lending decision.

    Keep in mind, the loan processor does not have a license and cannot provide guidance on suitable lending products or interest rates and terms.

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    There Is An Endless Amount Of Perks And Benefits

    Lets break down the semantics of the job market. Since the job market for mortgage loan officers is growing substantially year by year. Since the need for loan officers is increasing, especially with baby boomers leaving the job market, a great majority of loan companies will provide numerous perks and benefits to their mortgage loan originators that go above and beyond the standard origination fee. These perks and benefits include health insurance, payment increases, sales commission, 401k, and mortgage and advertising leads.

    In addition, some companies actually add on a few more specific perks for instance, some loan companies offer free gym membership, catered lunches, and extra vacation days. In actuality, the U.S. News & World Report concluded that loan officers were essentially able to establish great and comfortable lives at home and abroad. In all honesty, becoming a loan officer is downright rewarding, especially in the growing economy. With the constant demand and need for loan officers, more and more loan companies are going to extend valuable perks and benefits in order to stimulate the economy.

    Does A Loan Originator Cost Money

    Loan Officer Vs Underwriter

    Technically, yes, a loan originator does cost money, but loan origination fees are a standard part of closing costs. The loan origination fee may cover the processing and administrative work done by your loan officer, processor, and underwriter. The interest on your mortgage loan may help cover these fees as well. The disclosure forms you will receive as part of your mortgage application will include information on all the above.

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