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Have you ever used a loan officer to borrow money for a mortgage? This is only one of their many responsibilities. Loan officers, who are also known as mortgage loan officers, are people who represent a financial institution, such as a bank or credit union. Here are six ways that a loan officer can help you every step of the way when securing a mortgage, along with some considerations and warnings.
1. Answers questions and explain the process of purchasing a home
If you're like most new homebuyers, you probably have a lot of questions, regarding buying your first home. For example, a good loan officer can show you the benefits of using a real estate agent. Loan officers can inform you of any additional fees and costs that you'll need to pay. They also can explain the need for a home inspection when the home is under an appraisal.
2. Determines if you qualify for a mortgage
When you apply for a loan, it's the loan officer who is your direct contact. One of their main jobs is researching and reviewing every aspect of your financial history to see if you can qualify for a mortgage loan.
In other words, they have the job of contacting everyone involved in the process of getting a mortgage. This includes professionals, such as the real estate agent, the settlement attorney, the underwriter and others. This relieves you of time and stress from having to stay in contact with these different representatives and what they do.
3. Helps you choose the best loan for your needs
Because loan officers are extremely well-informed on all the different types of loans, they can provide excellent advice to borrowers on which loans are best for their specific needs. In addition to conventional loans, there are four other main types of mortgage loans for homebuyers, which include fixed-rate, adjustable-rate, government and jumbo loans. Also, loan officers can recommend the specific loans that borrowers are eligible to acquire.
4. Shows ways to get money for down payments
Unlike several years ago, many homeowners no longer stay in their first home for a long period of time. In fact, it's becoming more common not to put down an entire 20 percent down payment. Your loan officer can point out sources for coming up with funds for a down payment, such as loans from relatives and monetary gifts.
Some people even borrow money from their 401(k). A loan officer will caution you not to use all your savings to meet a down payment. What's more, your loan officer can help you with figuring out ways to cover expenses, such as moving and other costs.
5. Reviews your income and assets
Another important job of a loan officer is providing you with a financial checkup. These professionals carefully go over your income, assets and other aspects of your finances so that you have a better understanding of your financial health. After reviewing your financial situation, your situation, your loan officer can offer solutions for improving your finances. Examples include those, such as refinancing to consolidate debt or reducing monthly payments.
6. Strengthens an offer on a home
When you have a pre-approved loan, you're letting a seller know that your financial situation has already been checked by a lender and that you've been approved for a specific mortgage amount. This tells a seller that you mean business and that you have the resources for buying their property, so you're not wasting their time.
Other considerations and warnings
- Carrying debt that's not far from your credit limit can affect your credit score. Fortunately, a loan officer can show you how to improve your credit score.
- Loan officers can help you prevent foreclosure. For example, they know how to connect their clients with the right department that can help them find ways to prevent foreclosure so that their mortgage payments become current.
- The kind of loan that you're applying for can determine how much work that's required for a loan officer. In most cases, an unsecured loan doesn't entail as much documentation as what's required for a secured loan.
Questions? To find out more about how we can help you finance your dream home, contact us.
Please note, by refinancing your existing loan, your total finance charges may be higher over the life of the loan.