2/17/2023
In the world of mortgages, you will need to familiarize yourself with several terms that are important to understand the dynamics of mortgage lending. One of them is the MLO or mortgage loan originator.
Together with the real estate agent, they are the professionals who should look out for your interests and lead you to homeownership.
What is a MLO (Mortgage Loan Originator)?
Also known as a loan originator, this is a person or lender who is an essential part of the mortgage loan origination process.
This means that he or she is the first one to make contact with the person who wants to take out a mortgage loan and guides you through the entire process from start to finish so that you achieve your goal.
The mortgage loan originator may be employed at a credit union, a national bank or any other institution that offers such financing.
Although their salary depends on the company that hires them, most are compensated with commissions. Although MLO may stand for mortgage loan officer, this term only refers to a professional and not a firm.
Mortgage Loan Originator Functions
As mentioned above, the MLO is in charge of helping you with your mortgage application until closing.
Among his duties, he has to gather your credit and financial information, make a diagnosis of your needs, give you the best options according to your profile, negotiate the APR and submit your application for the underwriting process.
Keep in mind that the Mortgage Loan Originator will not be responsible for making the final decision on your application or the amount of the mortgage loan.
This is up to the contracts department, which evaluates whether you are a risk or not. In any case, the MLO has to guide you towards the best alternative for you.
Be aware that since 2008 these professionals have come under increased scrutiny in terms of licensing and other requirements inherent to their employment.
This includes the mandate to act in the client's best interest. For this reason, you should never feel under pressure to commit to terms without understanding what you are signing.
Also, it should be an expert who has extensive knowledge on topics such as:
- Financing products: there are several types of mortgages and the MLO should give you guidelines so that both of you can choose the product that best suits your finances.
- Mortgage rules and regulations: this subject includes a large number of federal laws governing mortgages. The MLO will tell you what to do so that both you and the entity you represent are in compliance.
- Documentation required for a mortgage loan: This is one of the most paperwork-intensive procedures, so you must have your documents in order to increase your chances of approval.
For your information: Bank of America Mortgages
Finally, the mortgage broker or agent sometimes assists you with the pre-qualification process, which helps you in your final decision. Pre-approval status allows you to shop for the home you want with the certainty that you could be given a set amount based on your credentials.
What you need to know to become an MLO
It's no secret that a career as a Mortgage Loan Officer/Originator has great flexibility and enormous earning potential. Now that you know what an MLO does, you may be curious about how to become one. To do so, we answer 4 basic questions:
How do I become an MLO?
The first step is to be registered with NMLS so you can become a licensed mortgage loan originator. This requires you to complete the 20-hour pre-licensing course, pass the accreditation exam and meet other state requirements. If you are just starting out in the industry, you can gain experience working as an LOA.
How long will it take me to become a Mortgage Loan Originator?
Accomplishing this goal will depend on how you organize your time to go through the entire licensing process. Generally, it takes about 45 days to meet the requirements to become an MLO.
However, as each state has its own particular requirements, it will depend on your ability to pass the background check and evaluations.
Do I need a good score to become an MLO?
You should not worry about your financial situation when you opt for this new profession. You just need to be certain that the license requires training, meet specific prerequisites and obey various national/state rules.
Can I be a Credit Originator and have another job?
As in most modern professions, you can choose to work full-time or part-time. The flexibility it offers you both to balance your personal/social life and to generate additional income.
Español: Qué es un MLO (Originador de Préstamos Hipotecario)?