A mortgage originator can help you find the right loan type, along with the best mortgage terms for you. Mortgage loan originators are both financial institutions creating mortgages, as well as specific individuals employed by those institutions that assist in facilitating the mortgage application process for borrowers. Because they originate loans, mortgage originators are part of the primary mortgage market; but often, they sell their loans rapidly to the secondary mortgage market.
Mortgage originators usually operate exclusively on a commission basis, receiving payment only when a loan is closed. These are mortgage origination fees charged by an MLO to process and underwrite the loan. Buyers pay a mortgage origination fee at closing to cover the costs of processing your loan.
For example, a borrower who has a $100,000 loan can expect to pay about $500-$1,000 for mortgage origination fees. However, borrowers who do not shop around before choosing their mortgage could end up losing money. The time you spend looking for a good mortgage originator can make the complicated mortgage process seem seamless and enjoyable.
Because the loan originator is such an integral part of the mortgage lending process, knowing how to pick one is crucial for making sure that you are getting the best mortgage for the best possible experience. An experienced loan officer will answer questions you have about the various types of mortgages, as well as explaining why the plan they are recommending is the best one for you. Mortgage loan officers also help borrowers determine what kind of loan is best for them, depending on their finances and the price they are buying.
The loan officer will take all this information to a mortgage underwriter, who will decide whether a borrowers finances fit the criteria for approval. The mortgage processor will do so by preparing the mortgage application document and other financial documents required to qualify for the loan. Once a loan originator helps the borrower identify the best mortgage for his or her situation and specifies loan terms, types, and sizes, all of the documents and information will be sent to a loan processor who manages paperwork for underwriters.
The mortgage broker takes applications, verifies credit and income, and usually handles most of the underwriting and processing, but they will eventually refer the loan to a lender who funds it at closing. A real-estate broker helps buyers find homes; a mortgage broker matches buyers with the lending institution that will give them the best rates.
More concretely, these professionals help buyers find home loans that are a good match — loans that are within their budgets and that allow them to remain in the homes they buy over the long haul. A loan originator can also be a mortgage broker, connecting borrowers with a number of different lenders in order to find the best financing fit for your needs. A loan officer might work at a mortgage bank, credit union, or institutional bank, and their employer might make home loan funds available directly to borrowers.
The duties of a loan officer include visiting with applicants to obtain loans and filling out many forms, particularly mortgage applications. A loan officer refers specifically to an individual who helps you with your mortgage application process, making sure that all documents are completed correctly and submitted on time.
A loan officer will take into account your annual salary, credit score, debt-to-income ratio, and overall amount of debt, but your annual salary is not the only factor that is critical in your ability to qualify for a mortgage. A mortgage originators salary will be determined by a number of factors, including the company he or she works for, his or her experience level, and the number of home loans he or she closes each month.
A mortgage originator/officer is typically a borrowers primary contact during the whole home lending process. A mortgage originator generally offers the mortgage products from one lender, and the entire lending process–from application through financing–is handled internally.
While banks use their own traditional sources of financing to close loans, mortgage bankers generally utilize something called a storage credit line for financing loans. In the mortgage business, loans are made either through banks or through non-bank lenders. Secondary buyers typically bundle pools of loans together in mortgage-backed securities (MBS) and sell them, usually to Wall Street investment banks.
Loans that satisfy multiple standards for mortgage investors are insured by them, then packaged into MBSs and sold on the bond market. To help achieve this goal, most mortgage loans are backed by one of several large mortgage investors, including Fannie Mae and Freddie Mac, and by the Federal Housing Administration (FHA) and Department of Veterans Affairs (VA). A broker acts as a middleman between the borrower and multiple lenders, but a mortgage broker firm does not actually supply money for a loan.
An independent MLO can potentially send your loan application to several different mortgage brokers or lenders, while a mortgage banker would send your application to their employer alone. MLOs assist you with the mortgage process, so you will want to work with someone knowledgeable about the residential mortgage lending industry and knows the details about the laws of your particular state. An MLOs primary role is to gather your pertinent information, help you complete a loan application, and possibly negotiate some terms of your mortgage, all in return for compensation.
Known in the industry as a Mortgage Loan Originator, or MLO, these professionals are key parts of the process that helps buyers find homes that are a good fit — typically, they are the main point of contact as the borrower goes through a mortgage process. Chase is a mortgage loan originator in its own right, but we also have loan officers who are called Home Loan Counselors who can help smooth out your mortgage journey — from pre-qualifying, through application, to closing, ultimately.