Do you want to work as a mortgage loan officer in the US but have no experience? Learn about the duties of a loan officer and more in this article
Working as a mortgage loan officer in the United States is not only a well-regarded profession—it can also be a lucrative one. This is why many are interested in joining the pool of loan officers in the mortgage sector. However, the early stages of working as one can be crippling if you have no idea about your duties and responsibilities.
In this article, Mortgage Professional America has listed five duties of a loan officer to help you jumpstart your career. These are the most common yet highly important responsibilities for this profession. We will differentiate a loan officer from mortgage brokers. We’ll go over their similarities as well. Want to know the most essential skill for loan officers? Read on to find out.
What is a mortgage loan officer?
A mortgage loan officer helps aspiring homeowners to apply for a loan to buy a house. They are employed by either a bank or a mortgage lender to introduce clients to the lender’s home loan options. Loan officers also look at the credit of mortgage applicants to figure out how much money they can borrow.
It is common for borrowers who want to buy their first home to talk to a loan officer as an initial step. The loan officer will then look at the person's credit score, income, and savings to determine their financial capacity.
It is the duty of loan officers to explain the different types of mortgage loans available to the borrower. They will help these applicants understand the terms and conditions of the home loan, so that applicants can make the best decision regarding their financial capacity and personal goals.
Are you interested in pursuing a career as a loan officer in the US? You might want to read a guide on getting started as one. Check out this article on how to become a mortgage loan officer in 10 steps.
What are the duties of a mortgage loan officer in the US?
These are the primary responsibilities of a mortgage loan officer:
- nurture relationships with real estate agents
- assess the credit of potential borrowers
- review loan options with potential borrowers
- ensure that loan agreements meet state and federal regulations
- keep records of loan applications and mortgage deals
Let’s take a closer look at these loan officer duties:
1. Nurture relationships with real estate agents
Loan officers should build lasting connections not only with their clients but also with real estate agents. These property agents will help clients find their dream house by presenting a wide array of choices. They can also point out affordable locations for those who are on a tight budget.
Having a network of real estate agents is helpful for loan officers because they can refer clients and put in a good word for them.
2. Assess the credit of potential borrowers
It is the duty of loan officers to examine the credit score of their clients before presenting the home loans offered by their employer-lender. This will determine their credit standing and the amount of money that clients can borrow to purchase a property.
To understand credit scores and how they affect eligibility for mortgage, here is everything you need to know about credit scores when buying a house.
3. Review loan options with potential borrowers
Since loan officers are employed by either a bank or a mortgage lender, it is their duty to review loan options before discussing them with potential borrowers.
It is crucial to understand every mortgage product and service offered by their employer-lender so that they can explain it to their clients.
4. Ensure that loan agreements meet state and federal regulations
Making sure that home loan agreements between mortgage applicants and lenders are compliant with state and federal regulations is a critical loan officer duty. This safeguards both parties if one of them violates the terms of the mortgage contract.
5. Keep records of loan applications and mortgage deals
Loan officers are expected to have a record of all loan applications and mortgage deals of their clients. Every document and paperwork should also be noted. If any problem arises during any transaction, those with proof will most likely have the upper hand.
Other loan officer duties
Aside from these five, there are other duties of loan officers that should be done with diligence and hard work. Those above might be the most common and highly important but going the extra mile might give you an edge.
For instance, loan officers should also work with underwriters to determine risks to potential borrowers. Another vital duty is to coordinate with appraisers to get an accurate market value for a home.
What does a typical day look like for loan officers?
A typical day as a loan officer revolves around many things. They get ready for work like any other professional in the mortgage industry. They perform the loan officer duties listed above and other necessary tasks. Like mortgage brokers, loan officers spend their day talking to clients and reaching out to their network in related industries like real estate and finance.
Aside from that, loan officers devote a lot of time generating potential leads. This is a big part of their job description as it helps boost their career. This is especially true for new loan officers. Lead generation for potential mortgage applicants is done via:
- phone calls
- referrals
- networking events
- other personal gatherings
- clients and contacts from a previous role
Are you interested to know more about what a typical day looks like for these mortgage professionals in the country? Check out this video to find out what it’s really like to work as a loan officer in the US:
If you want to work with the best names in the mortgage industry, visit our Best in Mortgage section. This includes lists of the best advisers and mortgage officers in the US and abroad.
Difference between mortgage loan officer and mortgage broker
The difference between mortgage loan officer and mortgage broker can easily be understood if you know their similarities. First, both types of professionals work within the mortgage broking industry. Loan officers and brokers also partner with banks and mortgage lenders to help their clients choose the right home loan.
The difference between these two lies in their employment. A big part of loan officers’ duties is to offer only the products and services offered by the bank or lender that they work for. Many banks, especially America's biggest banks, employ the services of loan officers to promote their mortgage offerings to eligible homebuyers.
On the other hand, mortgage brokers usually work as individuals. They work directly with prospective leads and clients then communicate with a variety of lenders to secure the right home loan for their needs and preferences.
Do loan officers and brokers need to be licensed?
Short answer: yes. Both mortgage professions are subject to licensing in the US.
Getting your license as a mortgage loan officer
To become a mortgage loan officer in the US, obtaining a license is a must. This requires passing the National Mortgage Licensing System (NMLS) exam. You will also need to complete pre-licensing education courses beforehand. To help you understand the NMLS exam for loan officers, check out this step-by-step guide on getting your NMLS license.
Not sure how you can best prepare for the exam? We’ve outlined the advantages of taking a mortgage loan officer practice test. This will help you pass with flying colors when you take the exam itself.
Getting your license as a mortgage broker
Like loan officers, mortgage brokers also need to be licensed before working in the country. To start your licensing process under NMLS, you must finish a mandatory 20-hour training course. Find out more in this guide on mortgage broker licenses.
Also, while one does not need to be a college degree holder, a high school diploma or General Education Development (GED) is necessary.
Which skill is the most essential for a loan officer?
The most essential skill for a mortgage loan officer is good communication. A huge part of every loan officer’s duty is to engage in discussions with numerous individuals, companies, and stakeholders. As such, they need to be good communicators.
Primarily, loan officers talk to clients when introducing them to the bank or mortgage lender that these officers work for. It is of utmost importance that they extensively discuss the mortgage products and options available and be ready whenever their clients raise a question.
Loan officers must learn how to communicate not only with confidence but also with clarity. Here are some key points in developing good communication skills as loan officers:
- be concise
- show humility
- listen with intent
- learn when to pause
- never lie or make things up
Finally, loan officers should know when to speak with intention for better discussion with clients and other professionals. Anything rushed can easily lead to mistakes, especially in communication.
Performing your duties as a loan officer
Becoming a loan officer in the US may not be a walk in the park but it is a career worth pursuing. Just like any mortgage profession, when one performs their duties with diligence and perseverance, their hard work will eventually pay off.
All in all, there is still much to do aside from the loan officer duties listed above. If you want to propel yourself faster and beat competition, doing more is the key. Remember, the fruits of labor are better than the gifts of fortune.
Do you know of other duties that loan officers have in the US? Feel free to share your insights in the comments section below.
