What Are Mortgage Loan Originators?

What Are Mortgage Loan Originators?

Getting approved for a mortgage has a lot of moving parts—and mortgage loan originators help streamline that process. These are licensed professionals who guide homebuyers in applying for and securing a home loan. That includes seeing them through:

• Getting preapproved: This involves submitting financial information and consenting to a credit check. The lender will then determine how much you can expect to borrow and at what interest rate.
• Mortgage underwriting: When you formally apply for a mortgage, the lender will assess your finances to ensure that you can afford your home loan. This process is called underwriting—and you can expect the lender to go through your credit health, income, employment and assets with a fine-toothed comb.
• Closing on the loan: The lender will do a final review of your application and make sure you've provided all the supporting documents they need. At the closing table, you'll sign the necessary paperwork, provide your down payment, pay for closing costs and complete the home purchase.

What Does a Mortgage Loan Originator Do?

Think of the mortgage loan originator as the intermediary between the homebuyer and the lender. Their main role is to help mortgage applicants satisfy their lender's requirements and, if all goes well, get approved for a home loan. Their key responsibilities may include:

• Evaluating a borrower's finances: The mortgage loan originator should be familiar with the lender's eligibility requirements. They may ask high-level questions about your creditworthiness, income, assets, debts and expenses ahead of preapproval.
• Explaining different loan types and terms: They should lay out your loan options, walk you through different loan terms and answer any questions you may have. That can help you determine the right type of mortgage to apply for.
• Helping the borrower apply for their home loan: The mortgage loan originator can provide guidance on how to complete and submit your loan application. They'll also ensure that you have any required documents ready to go.
• Ensuring all regulatory and legal paperwork is complete: Your mortgage lender should provide key documents per federal and state law. That includes paperwork related to the terms, provisions and costs of your mortgage.

Learn more: The Complete Guide on How to Get a Mortgage

Types of Mortgage Loan Originators

There are two main types of mortgage loan originators. They perform similar duties, but there are some key differences to be aware of:

• Loan officers: This is someone who works directly for a mortgage lender that originates home loans, whether that's a bank, credit union or online lender. The loan officer should know the ins and outs of that lender's mortgage products, interest rates, eligibility requirements and application process.
• Mortgage brokers: Instead of working for one specific lender, a mortgage broker works independently with a wide range of mortgage lenders. They focus on building relationships with different banks, credit unions and lenders—then connecting borrowers with the best lender for their needs.

How to Choose a Mortgage Loan Originator

You'll want to do your due diligence to find a qualified mortgage loan originator. Here are a few simple tips to help you make an informed decision:

• Consider your needs. Whether you should work with a loan officer or mortgage broker will depend on the type of guidance you want during the homebuying process. A broker could connect you to a wider variety of loan options, but they may be incentivized to suggest a lender that charges higher mortgage fees.
• Check licensing and credentials. Buying a home is a major financial transaction. You can use the Nationwide Mortgage Licensing System (NMLS) database to ensure that your mortgage loan originator is in good standing.
• Ask about experience. Asking around among friends, family and real estate agents could point you toward an experienced mortgage loan originator. You can also read online reviews and check lenders' Better Business Bureau ratings.
• Compare rates and fees. No two mortgage loan originators are alike. It's wise to shop around and compare rates and fees before making a decision. That could save you a significant amount of money if you're financing hundreds of thousands of dollars.

Frequently Asked Questions

The Bottom Line

A mortgage loan originator acts as a point person for borrowers who are seeking a home loan. They're tasked with guiding them through the process, answering questions and taking steps to ensure a smooth transaction. In this way, a mortgage loan originator can be an important person on your homebuying team.

Part of their job is to review your finances and creditworthiness. The better your credit score, the more likely you'll be to secure a competitive interest rate. Want to know where you stand? You can get your FICO^® Score^☉ and credit report for free from Experian.