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At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict editorial integrity, this post may contain references to products from our partners. Here's an explanation for how we make money. Bankrate logo The Bankrate promise
Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next. Bankrate follows a strict , so you can trust that we’re putting your interests first. All of our content is authored by and edited by , who ensure everything we publish is objective, accurate and trustworthy. Our mortgage reporters and editors focus on the points consumers care about most — the latest rates, the best lenders, navigating the homebuying process, refinancing your mortgage and more — so you can feel confident when you make decisions as a homebuyer and a homeowner. Bankrate logo Editorial integrity
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You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey. Bankrate follows a strict , so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. You’re ready to buy the home of your dreams, and now it’s time to get the ball rolling on . That’s where a mortgage loan originator comes into play. Here’s what loan originators do, and what you can expect while working with one during the home loan process. What is a mortgage loan originator
A mortgage loan originator, or MLO — sometimes just known as a loan originator — is an individual or entity integral to the , or the initiation of a loan. From making first contact with the originator, to getting preapproved, to applying for a loan and on through to closing, the loan originator will help you move through the process as smoothly as possible. Mortgage loan originators can work for a big bank, a credit union or other lending institution, large or small. It depends on where they work, but many are compensated based on commission. Is a mortgage loan originator the same as a loan officer
You might hear the terms “mortgage loan officer” or “loan officer” (LO) used interchangeably with mortgage loan originator, but there is a slight distinction between the two. A loan originator can refer to the entity or institution (lender) that initiates the loan, and also to the individual professional who works with you. A loan officer strictly refers to the individual that helps you through the mortgage application process, ensuring that all documents are completed properly and submitted in a timely manner. Mortgage banker vs mortgage loan originator
A mortgage loan originator is different from a in that the originator won’t make the decision to approve or deny you a loan. In contrast, a mortgage banker can make this decision, and reviews your application in order to decide how much you can borrow and under what terms. What does a mortgage loan originator do
Mortgage loan originators help borrowers through the process and the loan closing. This can involve collecting your credit and financial information, assessing your needs and what loan options make sense for you, negotiating rates and submitting your application for . Importantly, a mortgage loan originator won’t make the final decision on your loan application or how much to lend you. That part is left up to the lender’s underwriting department, which evaluates your risk as a borrower. Before a mortgage loan originator can help you through the financing process, though, she will need to convince you that working with her is your best option. With that, some loan originators can feel and act like salespeople. Since 2008, loan originators have been subject to stricter state licensing and other requirements, including the mandate to act in the best interests of borrowers when possible. That said, you shouldn’t ever feel pressured by a loan originator to commit to a certain mortgage product without first understanding what the offer entails. What are the licensing requirements for mortgage loan originators
Becoming a mortgage loan originator requires either obtaining a state license or being federally registered as an MLO. In order to obtain federal registration, the individual has to be an employee of a depository institution (or a subsidiary of a depository institution), or an employee of an institution overseen by the Farm Credit Administration. MLO federal registrations are recorded in the Nationwide Mortgage Licensing System and Registry (NMLS). You can visit the NMLS to confirm your MLO’s registration. State licensing requirements vary slightly, but typically involve providing fingerprints for an FBI criminal history background check, undergoing a credit report check, taking NMLS pre-licensure education courses and then passing an exam. How much are mortgage origination fees
A is a charge from a mortgage lender that covers the cost of services such as loan origination, processing and underwriting. In general, you can expect the origination fee to range from 0.5 percent to 1 percent of the total amount you’re borrowing for your mortgage. How to choose the right mortgage loan originator for you
When you’re seeking a mortgage, you have the ability to compare and choose between mortgage lenders and loan originators. It can be tempting to go with the first one you contact — you might even be impressed with the person’s offer or pitch. Borrowers who don’t shop around before choosing a mortgage, however, can lose money. In fact, almost half of all homebuyers skip the rate-shopping process, according to a . You could save an average $1,500 over the life of your loan by obtaining at least one extra rate quote, the study shows, or an average of $3,000 by getting five quotes. Fortunately, it’s easy to and with Bankrate. Take time to , and be sure to consider offers carefully, including comparing the APR and fees and any additional perks a loan originator shares with you. If you run into a hard pitch, stand your ground. Politely request a quote and let the loan originator know you might circle back when you’ve reviewed all of your options. Although it can be an uncomfortable conversation to decline an offer or ask for more time, your mortgage is a significant financial commitment, and it pays to be thorough. It’s also important that you can envision working well together with your loan originator. If you can’t picture working on a major financial puzzle with the person, then he’s likely not the right fit. Ask questions about the loan originator’s communication style — will you regularly hear from him with status updates? — and confirm that it meets your preferences. Ultimately, the right mortgage loan originator will have your best interests in mind, and create a smooth application and closing experience for you. Learn more
SHARE: Sarah Sharkey is a contributing writer for Bankrate. Sarah writes about a range of subjects, including banking, savings tips, homebuying, homeownership and personal finance. Suzanne De Vita is the mortgage editor for Bankrate, focusing on mortgage and real estate topics for homebuyers, homeowners, investors and renters. Related Articles