What Is a Mortgage Loan Officer?

What does a mortgage loan officer do?

A mortgage loan officer is someone who works for a mortgage lender such as a bank or credit union and facilitates the mortgage process. A mortgage loan officer works with you as a homebuyer to help you select the right type of mortgage loan from their financial institution.

“Loan officers guide borrowers through the loan application process, collect necessary documentation and facilitate the underwriting and approval of the mortgage,” said Freida Curry-Terry, a licensed realtor in Richmond, Kentucky.

Once you’ve chosen a mortgage loan officer to work with, that person will help you assemble the required paperwork, such as proof of income, assets and liabilities. They may ask to see your credit report to identify the types of mortgages you’re eligible for.

Your mortgage loan officer will then guide you through the mortgage process, including mortgage pre-approval, the submission of your loan application and the eventual closing on your home loan. It’s their job to help you understand the details of your loan, including mortgage interest rates, closing costs and other fees.

» MORE: How to get a mortgage

What qualifications does a mortgage loan officer need?

The Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act) of 2008 requires mortgage loan originators (MLOs) to have federal and state licensing through the National Multistate Licensing System (NMLS) registry. In order to remain licensed, mortgage loan officers must complete continuing education, along with other requirements, each year.

When you’re looking for a mortgage loan officer, you can locate the officer’s NMLS number on the NMLS’s Consumer Access site.

How do mortgage loan officers benefit homebuyers?

A mortgage loan officer provides invaluable guidance throughout the process of obtaining a home loan. Here are some of the benefits you may receive:

• Experience with your situation: You may be able to find a loan officer who specializes in your specific situation, such as an expert in mortgages for first-time homebuyers or self-employed borrowers.
• Experts on lender programs: Since a mortgage loan officer is employed by a specific financial institution, they’re generally an expert on their institution’s specific programs and offers.
• Knows what to ask: A superior mortgage loan officer knows the right questions to ask. Your loan officer should know the particulars of your specific financial situation, such as late payments on a previous debt or an employment gap.
• Advocates for you: A loan officer can guide you in writing a letter of explanation to a lender if you have previous financial or employment issues.

How to choose a mortgage loan officer

Choosing a mortgage loan officer is an important step toward choosing a home loan.

Research loan officers

Take the time to vet your options rather than picking the first loan officer that you see in your area. You should also check their licensing and credentials to verify that they are qualified to assist you with your mortgage needs.

» RELATED: Mortgage lender vs. bank

Seek personal recommendations

Ask friends, family members or even real estate professionals in your area for referrals to loan officers they trust. Be sure to get specific reasons why they like that loan officer since their priorities may differ from yours, and you want to make sure you choose the right loan officer for you.

Interview multiple candidates

While it may seem like a lot of work, it’s best to interview multiple mortgage loan officers. Discuss your financial situation and mortgage needs to learn about your loan options, and evaluate each loan officer’s professionalism and communication style. These interviews should also help you understand each loan officer’s expertise in specific loan situations.

Evaluate communication and customer service

When meeting with individual mortgage loan officers, pay attention to their communication style and transparency. Generally, loan officers should be accessible and provide personalized support, Freida Curry-Terry said. You should also select a loan officer who is up-front about all fees and timelines.

Compare mortgage rates and fees

While interviewing mortgage loan officers, you should compare the rates and fees for loan estimates. Evaluate interest rates and annual percentage rates (APRs), closing costs and other loan terms each loan officer provides.

» MORE: Mortgage APR vs. interest rate

Mortgage broker vs. loan officer: What’s the difference?

Mortgage loan officers and mortgage brokers fulfill similar roles during the homebuying process, but with one key difference. A mortgage broker may work with multiple lenders.

“A mortgage broker is an independent financial professional who acts as an intermediary between borrowers and multiple lenders,” said Freida Curry-Terry.

Like a mortgage loan officer, a mortgage broker gathers your financial documents and assists you in selecting a lender and home loan. The broker will also help you navigate the entire loan application and closing process. A mortgage loan officer, however, works for a single financial institution. Because of this, a mortgage broker has more flexibility, which means they can potentially provide access to a broader range of loan products.

Whether you choose to work with a mortgage broker or a mortgage loan officer depends largely on your preferences. Either way, Curry-Terry said to select someone who is “reputable, licensed and transparent in their dealings with you.”

Bottom line

Unless you opt for a fully digital mortgage process, your loan officer will guide you through the process of obtaining a home loan with one specific financial institution. Their expertise can help ensure you get the best deal. Asking locally for recommendations and obtaining quotes from mortgage loan officers can also aid you in selecting the right person for the job.

“Take the time to research different loan officers and compare their services, experience and customer reviews,” Freida Curry-Terry said.