Mortgage loan originators play a critical role in the home buying process As a mortgage professional, your job duties directly impact whether a borrower can achieve the dream of homeownership. This article will provide a comprehensive look at what mortgage loan originators do on a day-to-day basis.
What is a Mortgage Loan Originator?
A mortgage loan originator (MLO) is a licensed finance professional who helps consumers through the mortgage application and approval process. MLOs work for mortgage lenders, banks, credit unions, and mortgage brokerages. Their goal is to connect homebuyers with the ideal loan product and terms for their financial situation.
MLOs have direct contact with borrowers. They interview applicants collect financial documents, submit completed applications to underwriting facilitate appraisals and inspections, and guide the client to a smooth closing. MLOs act as the central point of contact for borrowers throughout the home loan process.
Key Responsibilities of a Mortgage Loan Originator
The core duties of a mortgage loan originator include:
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Processing mortgage applications – Thoroughly review borrowers’ credit, income, assets, and debts to determine the optimal loan amount, program, and rates for which they will qualify. Take the applicant’s information and complete the mortgage application. Submit to underwriting for approval.
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Advising homebuyers – Educate potential borrowers on different types of mortgage products and financing options. Explain loan terms, mortgage insurance, interest rates, monthly payments, closing costs, and more. Help buyers understand their options so they choose the best home loan.
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Prequalifying borrowers – Provide preliminary loan approval by analyzing an applicant’s credit history and income. Determine the maximum home price and loan amount they can afford. Write prequalification letters so buyers can make competitive offers.
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Collecting documentation – Obtain all required documents from borrowers such as tax returns, bank statements, debt information, property appraisals, title reports, employment verification, and any other files needed to underwrite the mortgage application.
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Managingpipeline – Keep organized records of clients at every stage of the loan origination process. Follow up on outstanding tasks and information. Communicate status updates to real estate agents, processors, and underwriters involved in each mortgage file.
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Closing loans – Prepare closing disclosures and coordinate with settlement agents to ensure borrowers have a smooth closing experience Review final loan terms and answer last minute questions
Key Skills for Mortgage Loan Officers
To succeed as a mortgage loan originator, these skills and traits are beneficial:
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Communication abilities – Clearly explain intricate mortgage products in easy to understand language. Actively listen and respond to buyers’ unique needs and concerns.
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Attention to detail – Review applications for completeness and accuracy before submission. Follow up to obtain any missing info. Identify and resolve discrepancies.
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Time management – Handle a high volume pipeline and multitask effectively. Meet deadlines to avoid delaying loan approvals. Promptly return calls and emails.
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Industry knowledge – Stay current on mortgage guidelines, trends, regulations, and interest rates. Understand loan products, credit requirements, debt-to-income ratios, seller concessions, and down payment options. Know how to structure loans to get approved.
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Customer service skills – Provide an exceptional client experience. Guide anxious homebuyers through the intricacies of mortgage financing. Build trust and alleviate frustrations.
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Sales abilities – Match each client with the optimal loan product and price. Confidently advise buyers and real estate agents on mortgage options. Ask for referral business.
Mortgage Loan Originator Work Environment
Many mortgage loan originators have a busy office environment with frequent client meetings and phone calls. Others work remotely from home offices. Travel is sometimes required to meet borrowers at their home or workplace for loan signings.
MLOs collaborate with processors, underwriters, title companies, escrow officers, real estate agents, and other loan team members. Strong communication skills are necessary to coordinate among multiple parties and keep transactions moving forward efficiently.
Hours can be long and irregular during busy markets. Evening and weekend work may be necessary to accommodate borrower schedules. MLOs must meet tight deadlines since borrowers with preapprovals are waiting for clear-to-close. There is pressure to close as many loans as possible.
How to Become a Mortgage Loan Originator
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Earn a high school diploma or GED certificate. Coursework in finance, accounting, economics, and computers is helpful.
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Complete 20+ hours of pre-licensing education classes approved by the Nationwide Mortgage Licensing System (NMLS).
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Pass the National and State licensing exams administered through NMLS. You must pass both with a score of at least 75%.
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Submit license application, fingerprints, and background check authorization to your state department of banking.
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Obtain surety bond coverage based on state requirements.
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Find employment with a bank, mortgage company, brokerage, or credit union. Some large lenders provide on-the-job training programs.
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Take continuing education each year to renew your NMLS license. Ethics and lending standards courses are required.
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Join industry groups to access training and networking opportunities. The National Association of Mortgage Brokers and State MBA groups offer benefits.
How Much do Mortgage Loan Originators Earn?
According to the Bureau of Labor Statistics, the average national salary for a mortgage loan officer is $63,000. Actual incomes vary based on experience, location, employer type, and commission structures.
Base salaries for MLOs range from $40,000 to $70,000. Commission bonuses can exceed base pay, especially when origination volume is high. Top producers can earn $100,000 – $150,000 per year. Loan officers working for banks and credit unions typically earn less than those at independent mortgage companies.
Professional Advancement Opportunities
Ambitious mortgage loan originators can pursue these advancement opportunities:
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Move into management as a sales manager, branch manager, or production manager overseeing a team of loan officers. This allows you to earn overrides on their sales.
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Transition to an underwriter role reviewing and approving mortgage applications for eligibility and completeness. Become an expert on loan guidelines.
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Relocate to a corporate office position in marketing, compliance, risk management, or IT to expand your expertise.
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Open your own branch office for an existing lender or start an independent mortgage brokerage and hire loan officers.
The Importance of Mortgage Loan Originators
General Responsibilities of a Mortgage Loan Officer
MLOs are responsible for securing loan file financial documents from potential borrowers, analyzing the loan file data, and consulting with prospective borrowers to educate them on varying loan products. Aside from these main tasks, they are also expected to:
- Collect and organize client’s financial information
- Assess client creditworthiness
- Assess client eligibility for obtaining a mortgage loan
- Connect with clients
- Guide clients through appropriate mortgage loan options
- Prepare and submit client mortgage loan applications
- Guarantee you’re abiding by national and local financial rules
Those responsibilities sound all fine and dandy, but what do they really mean? Let’s break down each of these tasks into what they entail in full.
- You will meet with and interview potential and current clients to understand their lending needs, including first-time mortgages and refinance of existing loans.
- You’ll explain the differences between and approval requirements of various types of mortgages, followed by preparing and presenting a lending package based on your client’s needs
- You can look forward to helping clients through mortgage applications
- You’ll review loan applications, gather credit histories and reports, and assess applicants risk
- You will grants or reject mortgage applications
- Sometimes you’ll be expected to view or visit property for real estate purchases or refinancing
- Throughout your time as an MLO you can expect to develop contacts with real estate agents, developers, and builders
- You are always responsible for staying up to date on industry trends, developments in the local real estate market, and rules and regulations for various mortgages
Common Required Skills of a Mortgage Loan Officer
Now that you’ve got an idea of the duties that’ll be expected of you, we have to talk about the skills many employers will be looking for you to have mastered.
- Interpersonal and customer service skills
- Organizational skills and attention to detail
- Thorough understanding of Federal Housing Authority (FHA), Veterans Affairs (VA), Federal National Mortgage (Fannie Mae)
- Full knowledge of construction and conventional loans
- Understanding of Microsoft Office Suite or related software
Some employers will require a degree in Finance or Business Administration, and experience in the industry is generally preferred.
With the demand for real estate expected to rise in the next decade, the mortgage industry is one of the best verticals for those looking to start a new business and directly benefit from their own hard work.
What does a Loan Officer Loan Originator Do? (Loan Officer Day In The Life)
FAQ
What are the duties of a mortgage loan originator?
What is the job description of an originator?
What does a mortgage loan originator do on a resume?
How do I write a mortgage loan originator job description?
To write an effective mortgage loan originator job description, begin by listing detailed duties, responsibilities and expectations. We have included mortgage loan originator job description templates that you can modify and use.
What is a mortgage loan originator?
A mortgage loan originator (MLO) is a person or institution that helps a prospective borrower get the right mortgage for a real estate transaction. The MLO is the original lender for the mortgage and works with the borrower from application and approval through the closing process. An MLO can be a lending company, mortgage broker or loan officer.
How do mortgage originators make money?
Many mortgage loan originators bundle individual loans to sell them on the secondary mortgage market and use the proceeds to fund more mortgages. Most mortgage loans are backed by one of several major mortgage investors, including Ginnie Mae, Fannie Mae and Freddie Mac. Institutional investors insure and purchase loans that meet their standards.
Can a mortgage loan originator work from home?
Mortgage loan originators can sometimes work from home, depending on their current work assignments and company policy. Was this answer helpful? What are the job prospects for a mortgage loan originator?