Securing a new home can be very expensive, so getting a home mortgage is almost always necessary. Unfortunately, US home buyers face one of the priciest markets in history, requiring larger mortgages than ever. According to a mortgage report by USA Today, the average 2022 loan size sits at $427,000, with mortgage interest rates soaring well above 7% in some cases. In comparison, 2021 interest rates sat at an average of 3%, meaning home buyers have to pay $1000 more in mortgage payments today. Many people have turned to side hustles or additional jobs to meet these mortgage requirements and other living expenses. However, this often leaves them little time to look for the best mortgage plans.
This is where mortgage loan officers come in. They help aspiring homeowners process these loans and ensure home buyers can get the best deals. LHH defines loan officers as professionals who evaluate loan applications for businesses and individuals, helping clients get a loan that fits their needs and financial possibilities while assisting applicants in understanding the terms of each loan. They also make sure that requirements are reviewed and submitted correctly. With their assistance, home buyers can secure better mortgage loans.
Mortgage broker vs. mortgage loan officer
As mentioned above, mortgage loan officers assist home buyers in securing a loan that best suits their financial standing and preferred terms. Mortgage brokers perform a similar function, but rather than working for one institution, they provide a more comprehensive range of loan options from different lenders. However, hiring mortgage brokers may include paying a broker’s fee that you have to pay directly or through commission. As shared in our post “How to Calculate the Finance Charge on a Mortgage Loan?”, these are typically included in finance charges expressed as an annual percentage rate (APR). It’s also not reasonable to assume that all brokers will give the best rates, as they may have different lenders that provide larger commissions for referring home buyers.
Advantages of working with mortgage loan officers
While mortgage brokers provide a wider variety of loan options, they often hold little negotiating power with specific lenders. On the other hand, mortgage loan officers are often more knowledgeable about specific programs within an institution and can adjust terms to your needs. Listed below are the benefits of choosing a mortgage loan officer:
Responsive customer service
Mortgage loan officers not only find the best mortgage loan but also invest time in helping clients submit credit and loan documentation. They ensure home buyers aren’t missing important information or dates required for securing a mortgage by regularly keeping them up-to-date from application to closing, keeping the entire process moving as efficiently as possible.
Maintain business relationships
Even after securing the mortgage loan, good loan officers put in the time and effort to stay in contact to develop long-term business relationships. Considering how loans often last years or even decades, there may come a moment when home buyers want to make changes to their financing or potentially secure another house mortgage. Addressing future concerns with the same trusted loan officer saves time and money.
Other things to consider
The ultimate goal of comparing mortgage loans and rates is to obtain favorable terms that protect finances. It’s important to remember that, unlike mortgage brokers, mortgage loan officers are obliged only to provide programs from their institution, which may limit your mortgage loan options. Furthermore, while there may not be any upfront officer fee when processing loans, other fees may be involved. As shared by the Consumer Financial Protection Bureau on mortgage loans, there are origination and lender charges, points, and third-party closing costs, some of which you can negotiate with the loan officer. By considering these, home buyers can ensure that they are securing the best mortgage loan deals while also receiving good service.
Written by Alicia Sebastian (a contributing author)