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HomeLoansWhat to Look for in a Loan Originator

What to Look for in a Loan Originator

Buying a home is a huge financial decision. As a first-time home buyer, applying for a mortgage can be overwhelming and technical. If you are trying to get a mortgage for your home as a first-time buyer, you will need a mortgage loan originator.

A loan originator will guide you through your loan and mortgage application process. They will advise you on the loan types and mortgage plans best for you. You cannot get a mortgage without a licensed or federal registered loan originator.

In this article, we will discuss in detail what you should look for in a loan originator.

Who Is a Loan Originator?

A loan originator, or mortgage loan originator (MLO), is a professional that puts mortgage applicants and people who want to take loans through the approval process. Loan originators guide them from preparing loan applications to mortgage closing. MLOs work at banks or brokerage firms. The law requires loan originators to be registered and licensed.

A mortgage loan originator in Denver can be an individual or a bank, or a lending company that performs unique roles to help you get a mortgage. The specific person you talk to about a mortgage that puts you through your entire application process is called a loan officer. Also, a mortgage loan originator can be the institution that funds your mortgage loan. This institution can be a bank or non-bank lender. 

The Role of a Loan Originator

The first thing an MLO does is obtain a pre-approval letter for you. A pre-approval letter is a document from a lender stating they are willing to loan you a certain amount. The loan officer will advise you on how much to borrow based on the financial documents you provide. Once you have a pre-approved letter, you can make an offer on a property within the range of your intended loan. 

Your mortgage loan originator will help you find the best payment assistance grants and programs, especially if you are a first-time home buyer. If your offer to purchase a home is accepted, your MLO will conduct a property valuation to make sure the home is in good condition and is worth the price. Additionally, the loan originator will get the title and other legal documents for the home. They will update you during the loan risk assessment and mortgage closing process.

But, before a loan originator can guide you through the mortgage application and lending process, they need to prove that they can offer you the professional customer service

What to Look Out for When Choosing a Loan Originator?

1. License

A mortgage loan originator must have done all of the following to be eligible for a license. 

  • Attend classes
  • Undergo background and credit report checks
  • Take NMLS pre-licensure education courses
  • Pass state and national examinations and other requirements

An MLO must have a state license if they work with brokerage firms or be federally registered if they work at a bank. In order to obtain federal registration, the individual must be an employee of a bank or a subsidiary of a bank under the Farm Credit Administration.

Before you agree to work with a loan originator or loan officer, confirm their registration in the Nationwide Mortgage Licensing System and Registry (NMLS) database or with your state licensing board.

2. Good Reputation

Make inquiries and find out the business reputation of your potential loan originator. Check out online reviews; what are their former clients saying about them? Take note of negative reviews, if any. On your own, observe the loan officer and see if they said credibility matches your personal experience. Find out if they have relevant experience getting the loan you need. Ask them for their portfolio so you can take a look at their work history.

3. Excellent Customer Service

Your potential loan originator should possess soft skills that improve your customer experience and guarantee customer satisfaction. The loan originator should communicate effectively and be available and responsive. They must provide regular updates and respond to calls and emails timely. 

A good loan originator should keep an open line of communication with you. Proper communication will allow them to guide you through the loan application process without needing physical meetings. A good MLO gives professional advice to help you make the right loan choices.

4. Patience

On many occasions, loan originators rush clients into mortgage and loan applications to meet their work targets or secure revenue. They put pressure on the customers and bombard them with information leaving them overwhelmed and confused.

A good loan officer knows that financial decisions require time and patience. Getting a mortgage is a huge deal. If you feel pressured, rushed, or overwhelmed by your potential MLO, they may not be a good choice for you. You should not feel obligated to pick a particular loan or mortgage plan.

5. Professional Advice and Suggestions

A good loan officer advises you on how you can improve your credit score and qualifications. As professionals, MLOs know the factors that get your loan application denied or approved. They can give recommendations on how to improve your credit score.

Good advice from a loan officer can save you from getting your loan request denied.

Even if your loan request is denied, following a loan originator’s advice can guarantee your chances of getting approval on your next try.

6. Transparency and Accountability

A good mortgage loan originator should be upfront and honest about loans and prospects at all times. They must follow all loan regulations and communicate information that affects your loan. They should always meet customers’ expectations.

Your research should go beyond the loan officer to the companies they work for. Does the company promote high standards and take responsibility for errors and mistakes? Ensure that your potential loan officer works with a reputable and ethical company.

7. Attention to Detail

Professional MLOs pay close attention to detail. They simplify the mortgage process in the first few meetings. They provide all the resources you need to make the right decisions. From the quality of service they offer, you are sure they are there with you every step of your application.

Good loan officers will tell you everything you need to know about getting a loan including the risks. They help you understand unfamiliar mortgage features and how it relates to you. These features or terms may be interest rates, mortgage underwriting, closing, private mortgage insurance, monthly payments, payment-assisted programs, and more.

8. Finding the Right Mortgage Loan Originator

Choosing the right loan originator can make your mortgage process easier. A good loan officer will help you choose the right loan amount and help you organize your paperwork. MLOs often connect their clients to reputable real estate companies. They will help you find the perfect home within your budget. When your offer for a home is accepted, it is the MLO that will conduct a property valuation to make sure you’re getting value for your money.

Ajeet Sharma, the founder of Financegab and a well-known name in the field of financial blogging. Blogging since 2017, he has the expertise and excellent knowledge about personal finance. Financegab is all about personal finance which aims to create awareness among people about personal finance and help them to make smart, well-informed financial decisions.


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