What Are The Duties Of A Mortgage Loan Officer
The duties of a mortgage loan officer include meeting with clients to complete loan applications, processing mortgage loan applications, and approving or denying loan requests. Mortgage loan officers represent the financial interests of their company with the goal of earning profits through loan interest payments. They may offer special interest rates or promotions to customers to encourage them to take out a mortgage loan from their financial institution rather than another lender.
What Does A Junior Loan Officer Do
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A junior loan officer assists a mortgage loan officer in processing and closing residential mortgage applications. This includes consulting with the loan applicant about their financial backgrounds to determine whether they can pay a home mortgage. They provide information on various loan offers and mortgage programs that applicants may choose from. They discuss policies and coordinate with senior mortgage officers about the concerns of clients.
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How To Become A Loan Processor
The key to becoming a loan processor is developing a skill set that is diversified and works well in the financial industry. Gaining as much experience as possible through on-the-job training sessions and online financial courses will set you up to be more of an appealing hire. Lets review the steps you should take to become a loan processor:
Step 1:Earn a high school diploma. This is usually a minimum educational requirement at many loan companies.
Step 2:Earn a higher-level degree. Its highly recommended to graduate with at least an associate degree in a related subject, like finance, banking or business. This allows you to have the basic concepts of financial management and banking practices down.
Step 3: Receive your mortgage license. Youll need to take the NMLS Mortgage Education pre-training and pass the Mortgage License National Test to receive your mortgage license. This process will depend on the state that you reside in.
Step 4: Obtain employment. A loan processor works at places like credit unions, mortgage lenders and banks. From there, youll want to receive on-the-job training. Its recommended to obtain computer software, communication and information processing skills.
Step 5:Work your way up. The longer you stay in the field, the easier it will be to advance in financial positions.
The salaries listed below do not represent salary estimates from Rocket Mortgage® and were pulled from the Bureau of Labor Statistics for educational purposes only.
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Tactics To Watch Out For
As mentioned above, mortgage brokers may not always come up with the best possible offer if it’s not in their financial self-interest to do so.
Loan officers may have similar conflicts. Bear in mind that loan officers are essentially salespeople who get paid for selling you somethingspecifically, a loan. The loan that is best for you and the one that’s most lucrative for them may be two different things.
For example, be wary if a loan officer seems to be trying to steer you into an adjustable-rate mortgage . ARMs can be a good choice for certain people, especially those who know they won’t be in their home for very long. However, if you are planning to stay in your home for more than seven years or so, then an ARM may not be a very good choice, since the interest rate could dramatically increase over that period. A fixed-rate loan would be safer, even if it starts out with a higher interest rate.
Because it behooves loan officers to sell as many mortgages as possible, some may be tempted to steer you into an ARM with the idea of persuading you to refinance with a new loan in a year or two. If you find yourself in that situation, before you take them up on the offer you’ll want to find out:
Being A Loan Officer Can Be Really Lucrative
- There are few jobs other than doctors, lawyers, and sports stars
- That pay several hundred thousand dollars a year in salary
- Top loan officers have the potential to make that kind of money too
- And even average ones can make six-figures annually during good years
If a mortgage loan officer gets just one of those deals to go through, it often equates to a huge payday, sometimes as much as a few months salary working a minimum wage job or other lower paying jobs.
So thats the incentive, big money. But there are a number of questions you need to ask yourself before setting out in the mortgage industry as a loan officer.
First and foremost, it is not an easy job. Sure, a mortgage broker or bank may tell you that its simple. And yes, you may not have to work very hard in the traditional sense, or take part in any back-breaking work.
But factor in the stress, the near misses, lost deals, the shots to your ego, and the wheel-spinning and it isnt as effortless as they may make it out to be.
You will see deals fall through and you will waste a lot of time. You will have mental breakdowns as loans slip through your fingers, and brokers and real estate agents scream at you as deadlines close in.
You will undoubtedly make mistakes, which will require a phone call to the borrower to let them know you cant do the deal. It will be embarrassing and unpleasant.
All that aside, lets look at a loan officers typical day, not that any day is ever typical
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Mortgage Loan Officer Responsibilities Include:
- Analyzing complex financial data
- Resolving problems throughout application processes
- Building positive relationships with clients
Mortgage loan officer job requirements and responsibilities may vary with different employers. When crafting your own mortgage loan officer job description, be sure to tailor it to your needs.
Is Being A Mortgage Loan Officer Hard
Becoming a loan officer in California is not as hard as it sounds when you follow the right steps and remain focused on your goals. You will soon embark on a rewarding journey that marks the start of an exciting career. Depending on your dedication, you can meet the prelicensing requirements within a few months.
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Research Your State’s Licensure Requirements
Once you complete your pre-licensure courses, your next step toward becoming an MLO involves getting a valid mortgage origination license. State agencies issue these licenses, and each state has its own guidelines for obtaining MLO licensure. You also need to pay fees to receive MLO licensure, which varies by state.
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.
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Definition Of A Loans Officer
A loans officer is an employee of a lending institution that functions as the liaison between that lender and its customers that are applying for a loan.
A basic responsibility of a loan officer is to arrange a bank loan or mortgage that is in the best interests of both the applicant and the bank or the financial institution that they are employed by. The loan officer should possess a comprehensive knowledge of the types of loans that are provided by their particular financial institution and the requirements or conditions that are necessary for applicants to successfully qualify for them. However, in regards to mortgages, loans officers are not required to be licensed or specifically educated in this particular field other than the training provided by their particular employer.
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Are You Suited To Be A Loan Officer
Loan officers have distinct personalities. They tend to be conventional individuals, which means theyre conscientious and conservative. They are logical, efficient, orderly, and organized. Some of them are also enterprising, meaning theyre adventurous, ambitious, assertive, extroverted, energetic, enthusiastic, confident, and optimistic.
Does this sound like you? Take our free career test to find out if loan officer is one of your top career matches.
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What Is A Mortgage Loan Processor
A mortgage processor, also known as a mortgage loan originator or loan processor, sets up the borrower with the proper documents for the loan program they want to use. They guide the borrower through the first step of loan processing. Once the paperwork is finalized, the mortgage processor then passes it through to the underwriter.
Mortgage Broker Vs Loan Officer: Whats The Difference
A mortgage broker is a licensed financial service provider that works with multiple lenders to find the best interest rates and loan programs. A broker acts as an intermediary between the borrower and several lenders, but the mortgage brokerage company doesnt actually provide the money for the loan.
A loan officer typically works for one lender, which means they are limited to the products that a particular lender offers. A loan officer may work for a mortgage bank, credit union or institutional bank, and their employer can provide the funds for a home loan directly to a borrower.
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What Is A Mortgage Loan Officer
A mortgage loan officer is a representative of a bank, credit union, or other financial institution who assists borrowers in the application process. Most mortgage loan officers also work with individuals and small businesses on a variety of other loans.
Loan officers must have a comprehensive knowledge of lending products, as well as banking industry rules and regulations, and the documentation required for obtaining a loan.
Loan officers are paid either “on the front,””on the back,” or some combination of the two. “On the front” refers to charges you can see, such as for processing your loan, often called settlement costs. You can pay these fees either out of pocket when you sign the papers or by incorporating them into the loan.
If a loan officer makes money “on the back,” that means they’re receiving a sort of commission from the bank for selling you the loan. This is a charge that you do not see. When a loan officer claims to be giving you a “no out-of-pocket” or “no-fee” loan, they are still making money but are charging it “on the back.”
So isnt that better for you? Not necessarily. Although the bank is paying the loan officer a commission, the money is really coming from you, the borrower, in the form of a higher annual percentage rate to make up for lost fees. In fact, the lending institution could be making a lot more money this way, as it stands to get a higher interest rate for what could be 30 years or more.
What Are The Duties Of A Closer
The duties of a closer depend on one’s line of work or industry of employment. Typically, their responsibilities revolve around liaising with clients to ensure that they understand and adhere to all terms of the agreement, completing all requirements and necessary documents, and maintaining records of all transactions. A closer must also monitor the regular payments of clients to ensure their compliance with the agreement, answer any inquiries, perform follow-up calls, and address any issues or concerns, resolving them promptly and efficiently.
The next role we’re going to look at is the closer profession. Typically, this position earns a lower pay. In fact, they earn a $17,825 lower salary than junior loan officers per year.
While the salary may be different for these job positions, there is one similarity and that’s a few of the skills needed to perform certain duties. We used info from lots of resumes to find that both junior loan officers and closers are known to have skills such as “loan portfolio,” “loan applications,” and “outbound calls. “
On average, closers earn a lower salary than junior loan officers. There are industries that support higher salaries in each profession respectively. Interestingly enough, closers earn the most pay in the retail industry with an average salary of $28,100. Whereas, junior loan officers have higher paychecks in the real estate industry where they earn an average of $40,955.
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What Are Loan Officers Like
Based on our pool of users, loan officers tend to be predominately enterprising people. This finding is precisely in line with the primary work involved in the profession. The very word enterprising describes those who are ready to undertake projects of importance or difficulty energetic in carrying out any undertaking. Individuals or corporations seeking to qualify for loans from banks and other financial institutions invariably rely on their loan officers to be innovative and energetic in identifying the lending product that is best suited to their client.
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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How Do I Become An Efficient Loan Officer
Effective Mortgage Loan Officers must:
Mortgage Loan Officer Responsibilities:
- Interviewing clients and assisting them with the completion of loan applications.
- Working closely with the underwriting department to determine conditions for loan approval.
- Screening and assessing new mortgage applications for loan eligibility.
- Ensuring that personal information such as income and expenditure are received and captured.
- Identifying potential risks that can lead to a default on the mortgage loan.
- Preparing contracts for mortgage loans and ensuring they are signed correctly.
- Preparing loan closing documents once a mortgage has been repaid.
- Working closely with real estate agents to increase the number of loans in the companys loan portfolio.
- Ensuring compliance with mortgage loan regulations and privacy laws.
- Reporting to management on applications received, approved, and declined.
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How Is A Mortgage Loan Originator Different From A Mortgage Broker
A mortgage loan originator differs from a mortgage broker is that the mortgage loan originator works for a bank or financial institution. A mortgage broker works independently, shopping around the different banks and lenders to find you a suitable mortgage arrangement. This means a mortgage broker is not obligated to any particular financial institution. However, a mortgage broker may not be able to offer the range of services you might find at a bank.
Help Your Close Your Loan On Time
Your loan officer is like the quarterback of your home loan team. Their job is to stay on top of deadlines including your closing date.
A good loan officer will stay on top of things like:
- Ordering your appraisal
- Sending your loan to underwriting
- Collecting documents from you
- Order Title work
- Getting your documents to title
However, you should remember that this is a team effort. There are multiple parties involved in getting a loan closed and everyone must be prompt in doing their part in order to reach the deadline.
If you need to provide documents, its important to do that within 48 hours or let your loan officer know if you cant.
While this list is not exhaustive, these are just a few of the many things your loan officer should be doing for you. If you feel like you arent getting this level of service you should definitely get a second opinion.
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