Mortgage loan originator

What is a mortgage loan originator?

A mortgage loan originator helps a borrower choose the correct mortgage product and complete the application process. Mortgage loan origination is the first step in the mortgage process.

Deeper definition

A mortgage loan originator is the original lender for a loan and works with a team of mortgage professionals, such as underwriters and loan processors, to shepherd a loan through to closing. The mortgage loan originator collaborates with the applicant and provides guidance throughout the loan process, including evaluating whether an application is likely to be approved.

Mortgage originators typically work solely on commission, getting paid only if the lender approves the loan. This gives loan originators the incentive to help an applicant boost his or her chances for approval. Once a mortgage is approved and the loan closes, the loan originator will receive a percentage of the total loan amount.

There are two types of mortgage loan originators: mortgage brokers and mortgage bankers. Brokers connect applicants to lenders and handle all of the paperwork, such as completing the application and checking credit and income. Once it’s time for closing, brokers typically hand over the loan to a financial institution. A mortgage banker works for the bank or other financial institution from which the borrower is seeking a loan.

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Mortgage loan originator example

When a mortgage applicant meets with a mortgage loan originator, the originator conducts a preliminary interview to learn more about the applicant’s financial situation and homebuying needs. The originator helps the applicant throughout the loan approval process by collecting the required documentation and financial information, submitting the application and monitoring the process. If an applicant has concerns about his credit history due to credit card delinquency or other negative marks on his report, the mortgage loan originator will advise him on the effect it will have on his application and help the applicant try to work around the issues.

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