What Is a Mortgage Loan Originator?
The mortgage process can be a daunting one, but a mortgage loan originator’s job is to help borrowers navigate the process and choose a lender. Those seeking mortgages not only have a lot of decisions to make and plenty of paperwork to fill out, but they also have to worry about getting approved by the lender. Thankfully, they will have a mortgage loan originator to help them on their journey. Below we will explain in detail what a mortgage loan originator is and how real estate agents partner with them to make their client’s home buying process that much simpler. Let’s dive in!
What is a Mortgage Loan Originator?
As we mentioned above, a mortgage loan originator is primarily an advocate for hopeful homeowners as they navigate the home buying process. On top of that, mortgage loan originators will also help the client determine the right home loan for their unique situation. While there are three primary types of mortgages—conventional, interest-only and adjustable-rate mortgages—the mortgage loan originator will also cover FHA, VA, Combo, Balloon, and Jumbo mortgages to ensure borrowers choose the right loan for their purchase and one that they have the highest chance of getting approved with. Once the client and originator have collectively chosen the best mortgage type, a mortgage loan originator becomes the original lender of the loan. Hence, the name mortgage loan originator. The originator then works with a team of underwriters, processors, and closing agents to close the house and finalize the mortgage.
Mortgage Brokers vs. Mortgage Bankers
There are two types of mortgage loan originators: mortgage brokers and mortgage bankers. Mortgage brokers connect home seekers and lenders, taking the lead on all paperwork including verifying that the information the applicant provides is accurate. On the other hand, a mortgage banker is a mortgage loan originator that works for the bank a potential homebuyer is interested in securing a loan from. Mortgage brokers typically partner with several different financial institutions, while mortgage bankers just work for the one. The benefit of a mortgage broker is that they’re able to compare offerings and rates from several different lenders. However, if you’re already a member of a credit union or other bank, you may get the best rates with the mortgage banker at your financial institution.
How are Mortgage Loan Originators Paid?
Mortgage loan originators are essentially salespeople for home loans, so they usually only get paid once a home loan closes. This has its advantages and disadvantages. The advantages of this salary structure are that the originator is going to be helpful in selecting a loan option that a borrower will likely qualify for and they will be quick to answer any questions the borrower has along the way. The largest disadvantage of the originator’s salary structure is the same issue buyers may have with any salesperson. They may be pushy or try to persuade you in a certain direction to close the deal. Armed with this knowledge, however, there’s no reason real estate agents and borrowers can't take advantage of the benefits that come with working with a mortgage loan originator.
How to Mortgage Loan Originators & Real Estate Agents Work Together?
While mortgage loan originators and real estate agents have different roles, they both work to educate the client and help them buy the house of their dreams. Throughout the mortgage process, realtors will likely be communicating with the mortgage loan originators on behalf of the client. They will be checking on the status of the loan, facilitating back and forth questions, and keeping the clients from experiencing a lot of stress. Mortgage loan originators and real estate agents are resources for borrowers, during both pre-closing and post-closing. For this reason, they need to be familiar with each other’s roles so they can support each other throughout the process. At the end of the day, both parties want the home seeker to find a home they like and that they can afford and receive a home loan for.
Get Your Formal Real Estate Pre-License Education
While we hope this post has been helpful in explaining the role of a mortgage loan originator and how to best work with them as a real estate agent, it’s not a substitution for formal training. For online real estate education that you can complete on your own schedule, choose our Real Estate Pre-License Education.