If you are shopping for a mortgage to either buy a home or refinance your home chances are you will be speaking to someone at a mortgage company or your local bank or credit union. Most likely, you will speak to a loan officer about your mortgage. In order for you to best speak with this person you should know a little bit about them and what they do.
What is a Loan Officer?
A loan officer is someone who serves as a guide for you as you go through the mortgage process. This person will walk you through the whole loan process from the initial phone call or personal interview to the day that you get your mortgage. Review The Steps To Buying a Home for a more complete purchase loan process.
Loan Officers Are Called Many Titles – Consultant, Specialist
Loan officers also call themselves a mortgage consultant, loan consultant, loan specialist, mortgage specialist, lending consultant, lending specialist, mortgage lender, mortgage broker, and even mortgage company. You’ll also see loan officers call themselves a senior loan officer, senior mortgage consultant, senior loan specialist and so on. The term loan officer is widely used by a lot of different people for a variety of different reasons.
Loan Officers Work For A Licensed Company
The most important thing to remember here is that loan officers call themselves - and get called - a lot of different things but they work for a licensed entity such as a mortgage broker, mortgage banker, mortgage lender, a bank, or a credit union. These companies are licensed by either the state banking department of your state or the federal government to be able to either give you the loan directly from their company or place your loan with another lending company. This licensing requires special qualifications of the company, like a minimum number of years of experience, a minimum networth requirement, or hold a minimum amount of insurance to cover fraud - malpractice - errors - omissions etc., in order to be licensed.
Loan officers don't have to have these types of requirements to be able to sell mortgages. Some states do require loan officers to hold a type of license which demonstrates the loan officer's knowledge and competency levels. But not all states require loan officers to be licensed, although each year more and more states are requiring loan officers to get licensed and attend continuing education just like real estate agents.
What Do Loan Officers Do?
Given that loan officers can work for so many different companies there is no one uniform way to describe what a loan officer does. Different companies have different policies about who does what - when - where - how - etc. With this said, there are some basic functions that all loan officers should probably do.
- Guide the way through the loan process
- Interview you to find out what you want to do
- Get your credit report and review with your specific situation
- Determine best loan programs based on your specific situation
- Present you with your best loan options
- Provide you with required paperwork
- Collect your paperwork and turn it in to their processor
- Answer questions
- Lock your interest rate
- Communicate with you about the status of your loan
- Communicate with your real estate agent the status of your loan
Characteristics Of A Good Loan Officer
This section is my opinion. There are no set rules about what makes a good loan officer. I have been in the mortgage business since 1996 and have trained a lot of loan officers the business. The following are some of the more important characteristics I have seen in very successful loan officers.
- Good Communication Skills - Great what does this mean? At the very least, good loan officers are quit to respond to their customers. They are also available via phone, email and text. They will also keep their customers up to date about their loan status. They will also let their customers know up front if they are going to be unavailable for any period of time when they are working on their mortgage. A good loan officer will always listen first.
- Good Product Knowledge - Good loan officers attend training classes about old and new loan programs and products. They will also attend classes on loan fraud, marketing practices, best operating practices and procedures, ethics and other relevant topics to make themselves better professionals.
- Acts Fast, Always Has a Backup Plan - Good loan officers understand that market conditions change fast and require quick action. Also, with purchase transactions there are deadlines to meet and when things do not go as planned a good loan officer will plan ahead and always have a plan B. One of the first things I was taught when I got into the business in 1996 was to have a plan B. Even on the very best loans, as a loan offer we must keep an eye on a Plan B. We never know when a mortgage lender will drop a program, or other unforseen things come up and we have to move into action to get loans delivered on time.
- Never Blame Anyone But Themselves - The mortgage business is not rocket science, but there are a lot of moving parts and people. "S...tuff happens" and things do not always go as planned or expected. It is the loan officer's job, and this is why they get paid, is to make sure that loans they bring into their company are of good quality, get closed and get closed on time.
When things do not go as planned, it is the loan officer's responsibility and they should not put the blame on anyone. In my book, as a loan officer if you are going to blame other people then you shouldn't get paid such a nice commission on your loans - pay your processors more money if it their responsibility is what I used to tell my employee loan officers.
That about sums it up about loan officers. Loan officers serve an important function in the mortgage process. They act as the middle person between you and the lender. They provide a lot of guidance in getting a mortgage and provide solutions when things are not so simple. Always keep in mind, loan officers work for a variety of different companies including mortgage brokers, mortgage lenders, mortgage bankers, banks, and credit unions, no matter what their title, or name, or pay.
