What is a mortgage loan officer?

Find a licensed professional to guide you in getting a home loan

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Figuring out how to get a mortgage isn’t simple, and when buying a home, you need to work with several licensed professionals. One important person to have on your team is a mortgage loan officer who guides prospective homebuyers through the process of obtaining a home loan.

While mortgage loan officers perform a similar role to a mortgage broker, they’re not exactly the same. Consider these factors in finding the right mortgage loan officer to help you decide on a home loan and complete your application successfully.

Key insights

Mortgage loan officers are licensed professionals who assist homebuyers with the complicated process of purchasing real estate.

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A mortgage loan officer works with a single bank or lender, while a mortgage broker works with multiple lenders.

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A mortgage loan officer guides you in collecting key documentation and applying for a home loan that suits your financial situation.

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Talk to multiple mortgage loan officers to find the right fit with the best financial deal for you.

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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. Freida Curry-Terry, principal broker at 1st Choice Realty in Richmond, Kentucky, explained, “Loan officers guide borrowers through the loan application process, collect necessary documentation and facilitate the underwriting and approval of the mortgage.”

A mortgage loan officer works with you as a homebuyer to help you select the right type of mortgage loan from their financial institution.

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 and identify the types of mortgages you’re eligible for.

Note: a lender checking your credit will be reflected as an inquiry on your credit report. You may want to allow multiple lenders to check your credit within a 45-day window to limit the impact to your credit score, according to the CFPB. Multiple checks in this 45-day period will be reported as a single inquiry.

Your mortgage loan officer guides you through the mortgage process, including mortgage pre-approval, submission of 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.

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

A mortgage loan officer, on the other hand, works for a single financial institution. Because of this, a mortgage broker has flexibility, which Curry-Terry noted means they can potentially provide access to a broader range of loan products.

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 help you to navigate the entire loan application and closing process.

» 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 mandates a nationwide licensing and registration system for mortgage loan originators (MLOs). Mortgage loan officers must be credentialed through the National Multistate Licensing System Registry, or NMLSR.

When you’re looking for a mortgage loan officer, you should easily be able to locate the officer’s NMLS number. In order to remain licensed, mortgage loan officers must complete eight hours of continuing education approved by NMLS per year.

How do mortgage loan officers benefit homebuyers?

A mortgage loan officer provides invaluable guidance throughout the process of obtaining a home loan. You may be able to find a loan officer who specializes in your specific situation; for example, someone with expertise in mortgages for first-time homebuyers or self-employed borrowers.

The licensing requirements for mortgage loan officers should provide reassurance of this person’s expertise. Curry-Terry said that since they’re employed by a specific financial institution, “They can also provide insight into the institution's specific loan programs and incentives.”

If you prefer to choose from a wider variety of lenders with a potentially wider range of loan options, you may work with a mortgage broker instead. However, Curry-Terry explained that the decision between a mortgage broker and a mortgage loan officer depends largely on your preferences. Either way, she said to select someone who is “reputable, licensed and transparent in their dealings with you.”

Recognize that a superior mortgage loan officer knows the right questions to ask. For example, collecting documentation is a key step in the home loan process, but your loan officer should know the particulars of your situation. You need to know the options that apply to you, whether you’re a first-time homebuyer, are self-employed or have some negative marks on your credit report.

For example, late payments on a previous debt or a gap in employment are things a potential lender may flag. Your loan officer can guide you in writing a letter of explanation indicating that the lender can trust that you deserve a home loan despite past issues.

5 tips to choose the best mortgage loan officer near you

Choosing a mortgage loan officer is an important step toward choosing a home loan. You should take some time to vet your options rather than picking the first one that you see in your area.

Research loan officers

“Take the time to research different loan officers and compare their services, experience and customer reviews,” recommended Curry-Terry. You also need to check their licensing and credentials to verify that they are qualified to assist you with your mortgage needs.

Seek personal recommendations

Personal recommendations of mortgage loan officers can be valuable, Curry-Terry noted. You can ask friends and family members as well as real estate professionals in your area for referrals to loan officers they trust, and be sure to get specific reasons why they like that loan officer (their priorities may differ from yours).

Interview multiple candidates

While it may seem like a lot more work, you should 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, you should be on the lookout for indications of their communication and transparency. Curry-Terry said that dedicated loan officers should be accessible and provide personalized support. You want to select a loan officer who is up-front about all fees and timelines as well.

Compare mortgage rates and fees

During the process of interviewing mortgage loan officers, you need to also compare the rates and fees for loan estimates. Evaluate interest rates and APR, closing costs and other loan terms each loan officer provides.

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    How do mortgage loan officers get paid?

    Your mortgage loan officer is paid either through commission on the loan amount itself, or through salary at their employing financial institution. You might not see their exact fee in your mortgage documents, but they are paid in some manner through the lender’s profits. Ask mortgage loan officers how their compensation works if you’re concerned.

    Can I choose my own mortgage loan officer?

    You can select your own mortgage loan officer by researching multiple lenders and loan officers who work for them. The CFPB recommends contacting several lenders and several loan officers to explore your options.

    What if I'm not happy with my mortgage loan officer's service?

    You have the option to change mortgage loan officers (or even change lenders) after you’ve initiated your application for a loan. However, this will likely cause delays in the entire process as well as add to your costs, and there’s no guarantee you’ll find better service with another loan officer.

    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.

    It’s a good idea to research and interview several loan officers in order to make an informed decision. Asking locally for recommendations and obtaining quotes from mortgage loan officers can also aid you in selecting the right person for the job.

    Article sources
    ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. Specific sources for this article include:
    1. Consumer Financial Protection Bureau, “Contact multiple lenders.” Accessed March 8, 2024.
    2. Consumer Financial Protection Bureau, “SAFE Act Examination Procedures for Depository Institutions.” Accessed March 8, 2024.
    3. Consumer Financial Protection Bureau, “What happens when a mortgage lender checks my credit?” Accessed March 8, 2024.
    4. NMLS Resource Center, “Continuing Education Courses.” Accessed March 8, 2024.
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