Here’s What You Need to Know About Working With a Mortgage Loan Officer

Getting a mortgage is no simple task. Whether you’re buying or refinancing a home, the mortgage lending process involves navigating a path lined with paperwork and rules, and it can be confusing.

Enter mortgage loan officers. A mortgage loan officer is a professional whose sole purpose is helping consumers in the housing market obtain financing for their homes, says Carolyn Morganbesser, assistant vice president of mortgage originations at Affinity Federal Credit Union. Here’s everything you need to know about what mortgage loan officers do and how you can find one to help you.

Mortgage loan officers work for financial institutions such as banks and credit unions. They are knowledgeable about various lending products, industry regulations and what’s required to obtain a particular loan, says Durriya Pierce, a certified financial planner and financial advice expert at personal finance app Albert.

A loan officer can help you determine the type of credit or loan you need and can get, and will then coordinate with your real estate agent and lender throughout the application process, says James Call, senior loan officer at Guild Mortgage Co.

You can work with a mortgage loan officer if you’re applying for a new mortgage or trying to refinance a current one.

“Mortgage loan officers must be licensed or registered depending on the type of lending organization they work for,” Call says.

Mortgage loan officers can be paid a flat salary or a commission based on a percentage of the loan amount, Pierce says. Their pay cannot be based on the loan terms, according to federal regulations.

You can generally expect a loan officer to help with most of the key stages in obtaining a mortgage. “The loan officer takes or initiates the initial loan application, determines the options available to the borrower or counsels the borrower on corrective actions needed if credit is not available,” Call says.

You can also expect a loan officer to be in constant contact with you, updating you on the application and its progress, Morganbesser says. The loan officer will also help gather necessary loan documents and work with the title company or escrow service to complete the home sale, Call says.

Both mortgage brokers and loan officers can be mortgage loan originators – meaning both can help you through the mortgage process, according to Rocket Mortgage.

But they are not the same. “The major difference is a mortgage broker doesn’t work for a single lending institution,” says Gregory Harmon, assistant professor of banking and finance at the Weatherhead School of Management at Case Western Reserve University. “A broker works for a mortgage brokerage and is able to offer loans from multiple lenders, just like an insurance broker can offer multiple insurers’ products.”

Mortgage brokers may be able to access more competitive rates than mortgage loan officers since they’re not tied to a particular institution, Pierce says. But in practice, this is not always the case.

“The broker can find the best lender for the applicant based on the specific situation of the borrower – at least in theory,” Call says. “In reality, some brokers may only work with a few lenders, and the loan officers can ‘broker’ out loans that their lender can service.”

One way to find a mortgage loan officer is through your primary banking institution. As an existing customer, you might even see rate or fee discounts for using your bank to take out a mortgage. Your bank or credit union’s website or local branch may provide information about mortgage loan officers in your area.

“Many mortgage loan officers are found through referrals from a real estate agent, friend or family or through an internet search of mortgage companies,” says Dan Holtz, founder and CEO of mortgage company Sovereign Lending Group.

You may also get a good referral from a title company. Closers know which lenders and loan officers close their transactions on time and which are the least stressful to work with, Call says. He recommends researching the lender or mortgage company you’d like to use, then finding loan officers who work for that company.

“The best advice is to shop multiple lenders and don’t be afraid to ask for a discount,” Harmon says. “Make them earn your business.”

Just be aware that there are good and bad loan officers with each company, Call says. So be sure to talk with the loan officer before agreeing to use the services.

You can also check a mortgage loan officer’s credentials by entering his or her license number on NMLS Consumer Access.

“A home loan is a major investment,” Holtz says. “It is important that you find a loan officer you can trust.”