What does a Loan Originator do?

When you purchase or refinance a home, you need someone who can act not only as a source of funding but something more than that.

And this is where the role of loan originator gets the spotlight.  If you are lucky enough to find a reliable loan originator then you do not need to worry about getting second opinions, finding loan programs to match your needs as your loan originator will guide you in this regard.

A mortgage loan originator does not necessarily need a bachelor’s or any other degree but most of them get one to add value to their profile. Let’s discuss in detail about mortgage loan originator job description.

What is a Loan Originator

Before we start discussing the mortgage loan originator job description, it is important to first understand who exactly is a loan originator.

A borrower secures his mortgage by getting assistance from different people. This group of people contains a variety of individuals with expertise in different areas. The most important person in this group is the loan originator.

Mortgage Loan Originator Definition

The mortgage loan originator is the main person who arranges the mortgage for the borrower during the mortgage lending operation process.

He is also responsible for drawing borrowers, creating business contracts, finishing mortgage transactions, and managing his own team. Often, the person who is the main point of contact for the borrower is also the loan originator. Hence, the role of a loan originator is very significant for the mortgage lending operation and demands a special skill-set to successfully perform the job.

Mortgage Loan Originator Job Description

Normally a mortgage loan originator is responsible for several different tasks. We have explained below different components of the job description which you should know to avail the best services:

Learn The Client’s Needs & Requirements

The most important task of a loan originator is to take care of their client’s needs and requirements. One way to do this is by asking numerous questions to completely understand what their client wants. This way, a loan originator can find the correct loans at the rate easily affordable by their clients.

Guide the Client in Choosing The Right Property to Purchase

Another important aspect of mortgage loan originator job description is that they need to be highly skilled in analyzing the loan options on the basis of the type of property that their client intends to buy.

They guide their clients about the limitation in the loan options and how they vary from one property type to another. Therefore, loan originators always discuss the property details with their clients to help them choose the one that best fits their needs and budget.

For instance, a small apartment with particular characteristics might not qualify for a few loan programs, but this does not put an end to exploring other various options available to specifically match a particular client’s needs.

If clients are not sure about the property they want to pick out, then the loan originator has to note down their requirements and find one for them.

Understand The Client’s Employment Situation

Another important thing that loan originators are responsible for is to understand their client’s financial situation like the monthly income, total number of bread earners, total dependents, total expenses, etc.

If the client is a W2 employee, then things are pretty simple for those individuals who fall in the W2 category. Why so? Because of the bonus income, work history, and other related factors can make matters highly complicated. And for a W2 employee, these factors do not matter.

However, if the client is an entrepreneur and includes self-employed people like freelancers or individuals who run small home-based businesses, then it is essential for a mortgage loan originator to understand their employment details.

A good loan originator makes a checklist to cover maximum employment details without leaving any chance to miss an important detail. The details can include questions like the time duration of the established business, average income generated per month, types of deductions used, etc.

How Much do Loan Originators Make

It is not an easy task to manage people’s loans. You have to take numerous calls every day along with the lengthy paperwork and several mandatory follow-ups. This is the reason that the job of a loan originator is not a piece of cake for everyone.

But all these heavy responsibilities and duties come in the form of an attractive package that makes it worthy to become a loan originator. However, an important thing to mention here is that a loan originator salary cannot be higher or even competitive with the income of a lawyer or a doctor for valid reasons. But the salary is handsome enough to live a good and content life.

The average salary range of mortgage originators is from $50,000–$70,000 per year. Like every job role, there are certain exceptions. For example, some loan originators make only $40,000 on average per year while there are others who generate up to $100,000 per year.

The salary range of a loan originator changes on the basis of certain specific characteristics that are listed below:

Location

Like every job, the salary of a mortgage loan originator also varies from location to location. For example, an originator in rich cities like Los Angeles, New York, or Chicago makes more income than those living in other states.

Commissions

The majority of the firms give mortgage loan officers commissions in the form of additional income while others replace salary with commissions to pay loan originators. Therefore, ask your prospective employer about the type of income before signing the offer letter.

Education

Just like other several jobs, a mortgage officer’s salary and commissions depend on the level of their education and experience.

The total commission they get at each real estate they sell can increase by many folds depending upon their expertise. If a loan originator has worked for more than 20 years in the industry, then they become more experienced. They have gained enough knowledge about the system and how things work which results in getting more clients and ultimately higher commissions.

Although, the salary differs on the basis of a loan originator’s location but here’s a rough estimate of the industry average about how much do loan originators make on the basis of the total number of years in the industry:

Less than 5 years: $40,000

Between 5 – 10 years: $46,000

Between 10–20 years: $49,000

More than 20 years: $50,000

The salary of a loan originator can increase by $10,000 on average after gaining experience of around 15 years in the industry

Bottom Line

Now that you know what is a loan originator and major tasks included in mortgage loan originator job descriptions, you should ensure that you find the perfect guide with valid mortgage loan originator license to have the best experience.

You should lookout for a loan originator who can give you valuable advice and recommendations. Also, make sure that you treat the relationship in a good way and not just like a formality to complete the loan transaction process.