The process of purchasing a home comes with different rigors, contractual and legal works that make it impossible for a layman to walk through alone. Therefore, during the process, a couple of individuals or an organization helps out. This person or organization is called the mortgage loan originator, and their job is to ensure you know exactly what you’re doing. Essentially, mortgage loan originators tidy up simple activities and ensure the buyer understands the terms involved.
Who are mortgage loan originators?
Mortgage loan originators are individuals that act as a vital link between a buyer and their mortgage company. Basically, their job is to help the buyer access the most adequate mortgage tailored to their needs. Therefore, they trash our facts like choosing a loan, understanding its applicable rates, and finally walking through the terms associated. Mortgage loan originators tell you everything you need to know before obtaining a mortgage.
Also, mortgage loan originators usually have a good understanding of the banking industry rules and regulations, lending products, and other necessary documentation. Therefore, the collect and verify all documents from the mortgage borrower and rate their creditworthiness. They usually do this from their income and assets.
What are the types of mortgage loan originators?
There are mainly two types of mortgage loan originators, which are:
Mortgage bankers:
mortgage bankers work for a lending institution that funds the mortgage loan with its own money. Basically, they are mortgage agents for credit unions and retail banks. However, they do the job of a mortgage loan originator on behalf of their parent institution.
Mortgage brokers:
mortgage brokers, on the other hand, serves as a no strings attached middle man between the borrower and involved mortgage banking institutions. Therefore, they do not work for and are not employees of the institution. Instead, they receive mortgage application, checks credit rating and income of the borrower and even do the underwriting. However, after it is all said and done, they hand out the loan to a lending institution to fund it.
How do mortgage loan originators get paid?
The nature of their job is such that they get based solely based on commission after closing a loan. This is so that they can be at their most efficient and process clients as quickly as possible. Also, this payment system ensures that mortgage loan originators are not lazy. It also gives the incentive to help an applicant boost their chances for approval.
The commission pay per loan closing depends on the originator’s agreement with the lending institution. However, it is usually around 1%. Also, some mortgage bankers could have a standard salary, especially if they are full-time staff and have other responsibilities sides being a mortgage loan originator. Therefore, in this case, the institution could pay them a certain amount monthly, and include a lower commission which they get for every closing made.
Conclusion
Mortgage loan originators are a very vital part of the mortgage industry. They help facilitate mortgage processes for lenders, guiding them through the tiny details and ensure they know what they’re getting into. Also, loan originators judge the creditworthiness of clients to see if they are financially buoyant to pay up the loan they intend to obtain.
