Mortgage Loan Officer

The term “Loan Originator” refers to a licensed individual acting as an independent MLO. Independent loan Originators work as an independent mortgage broker who partners with hundreds of different mortgage lenders offering a variety of different mortgage programs so you can find the best loan options that meet your personal financial goals and specifications.

What Do Loan Originators Do?

MLOs will work with you through the steps of getting a mortgage, answering questions, collecting documents, and verifying information. If you’re purchasing a home, they’ll also provide an estimate of your loan amount and interest rate based on a review of your income, credit report, and assets. This mortgage preapproval can help you figure out your home-buying budget and show real estate agents and sellers that you’re willing and able to purchase the home.

The MLO will continue to work with you through the application process, into underwriting, and help ensure you’re ready for closing. Remember, an MLO can be a person or institution. While the loan officer is the person who works with you, the lender is the institution that initially funds the loan. A mortgage lender can be a bank or non-bank organization, like Rocket Mortgage®.

(MLO) Mortgage Loan Originator

Of all the parties involved in the mortgage process of obtaining a mortgage, the first person you talk to is likely talk to be an (MLO) mortgage loan originator. They may also be referred to as a loan officer. In almost all cases, this person is licensed through the NMLS to gather collect your personal data and advise on the mortgage loan programs available for your situation.

If you are seeking a mortgage refinance, this might mean analyzing your situation to determine the ability, gathering the paperwork, and figuring out the loan amount and type that meets your goals.

In a purchase mortgage transaction, you want to get a mortgage pre approval letter before you go shopping for a home to know how much you can afford. The MLO will be able to verify the cash, credit, and debt-to-income ratios to determine your maximum monthly payment amount. 

For both purchase or refinance after taking a complete application, running credit, and collecting all documentation the loan originator will recommend different mortgage loan programs available for the borrower’s situation. Once the borrower and the loan officer agree on the loan programs and the loan originator feels the borrower meets all the specifications of the program they will issue a pre-approval letter.

Questions About Mortgage Loan Originators

Now that you have a general understanding of what mortgage loan originators do, you’ll likely have some questions. We have the most common answers to some questions about MLOs.

How Are Mortgage Loan Originators Paid?

Services provided in a mortgage loan transaction aren’t typically free of charge. Mortgage loan originators are either lender-paid or borrower-paid. You may notice in your closing costs a line item called a “loan origination fee.” These are mortgage origination fees charged by the MLO for processing and submitting the loan. The underwriting charges are additional and average 800-1500 per loan. The MLO fees average 2-3% of the total loan amount.

Do (MLO) Mortgage Loan Originators Need To Be Licensed?

Mortgages come in several different loan types, have various qualifications, require certain documents, and vary in terms by different lenders and state laws. It’s important to work with an MLO that has knowledge in the residential mortgage loan industry and your specific state.

Nationwide banks are required to have federal registrations and do not require individual MLOs to obtain a loan originator license.

For non-bank lenders, like credit unions, MLOs are required to be licensed with individual states. An MLO could be licensed in multiple states, even if they work in one state. To become an MLO, one must meet the following licensing requirements:

  • Complete 20 hours of pre-licensing education
  • Score a minimum of 75% on the two-part nationwide SAFE Mortgage Licensing Act Exam, developed by the Nationwide Mortgage Licensing System (NMLS)
  • Agree to a thorough background check
  • Commit to continuing mortgage education each year

What Is A Mortgage Loan Originator’s Salary?

A mortgage loan originator’s salary will depend on several factors, including the company they work for, their level of experience and how many home loans they close per month.

If the MLO is a broker, they may be paid by their clients or by commission from the lender they partner with to close the loan. If the MLO is a loan officer, they’ll typically be paid an hourly rate or salary along with a commission earned per loan.

How Do You Choose A Mortgage Loan Originator?

MLOs help you navigate the mortgage process, so you’ll want to work with someone who is knowledgeable of the industry and knows the ins and outs of your specific state’s laws.

A mortgage can be a big financial commitment, too, one that also involves you sharing personal information, including Social Security numbers, bank statements and tax documents. It’s important to choose an MLO you can trust.

Choosing an MLO who is knowledgeable, helpful and trustworthy may require you to do some research. You’ll want to assessyour loan officer or broker and their company. First, make sure they have an up-to-date MLO license.

Then, look through their website, social media pages and third-party review sites to learn more about the company’s mission and what their past and current clients have to say. Ask friends and family for referrals. Talk to potential MLOs on the phone or visit them in person. It’s OK to shop around until you find the right lender, loan officer or broker for you.

The Bottom Line

An MLO should help make the mortgage process easier for you by walking you through the steps of buying or refinancing your home and funding your loan. If you’re ready to work with an MLO and get started with your purchase or refinance, apply for a mortgage with Rocket Mortgage today.