Working with a Mortgage Loan Originator: The questions consumers should ask.

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What Is A Mortgage Loan Originator?

A mortgage loan originator (MLO), is a licensed professional that assists a consumer seeking a loan to purchase a home or to refinance their existing home loan, and works with them throughout the loan approval process.

MLOs are licensed by the State of Colorado and registered by the Nationwide Multi-State Licensing System and Registry (NMLS). The NMLS system provides for all mortgage loan originators to be assigned a unique identifying number that is associated with them as they move between companies, and between states, helping to prevent problematic individuals from escaping the consequences of any past activities.

Helping With the Loan Process.

The MLO guides the loan applicant throughout the loan process, starting with preparing the loan application and finishing with the closing. They are very knowledgeable about all different types of loan products so that they can assist the consumer in finding the best loan for their particular situation.

When it is time to get a loan for the purchase or refinance of your home, the MLO will have you fill out a loan application and discuss available interest rates, fees associated with a particular loan, repayment periods, and any other special conditions that may apply. While guiding you through the loan approval process, the MLO will help you with the paperwork, take documentation and help you to figure out the loan amount and type that fits your goals.

When looking to purchase a home, you have the option to first get a loan approval (also called a pre-approval). This will help you know how much you can afford before you start looking for a home. An MLO will assist you with this process by helping to determine that amount based on one’s income, expenses, assets and credit.

If you go through with a home purchase, or are looking to refinance your existing home loan, the MLO will have you complete an application and provide documentation that will be used in the underwriting process, which is the phase that analyzes the information for qualifying for the home loan. Then once qualified and approved for the loan, the final phase is the closing on the property.

When working with an MLO, there are some typical questions that you should expect to be asked.
  • Have you ever owned a home before?
  • What are your present housing expenses and are you comfortable with that amount?
  • How long do you plan to live in your new home?
  • Do you know what your FICO score is and how good your credit is?
  • Is your job secure or do you have a dependable income?
  • Is any of your income received from commission or bonuses?
  • Do you plan on experiencing any financial changes in the near future?
There are many questions that you can ask your MLO to help understand the loan process and what is all involved with obtaining a loan.
  • What types of loans do you offer?
  • How do I qualify for a loan?
  • What is the difference between being pre-qualified and pre-approved?
  • How much house can I afford?
  • How much down payment will I need?
  • Do I qualify for any sort of specialized loan or down payment assistance programs?
  • What loan products would you recommend as best for my situation?
  • What documents will I need to provide as part of my application?
  • What could happen that would hold up my application? What can I do to avoid any delays?
  • How are you paid for your services?
  • What will be my interest rate?
  • Can I get a loan rate lock and do you charge for an interest rate lock?
  • What is my annual percentage rate?
  • Do you have an origination fee?
  • What are discount points and how many mortgage discount points can I buy?
  • What will my monthly payment be and what will the payment all include?
  • What is the loan estimate of all the costs associated with the loan?
  • Will I have to pay mortgage insurance?
  • Can I make extra payments to reduce the principal?
  • Is there a prepayment penalty?
  • What happens if my home appraisal comes in low?
  • Will I have to pay an additional fee if a payment is late?
  • Do you approve the loans and handle underwriting in-house?
  • How — and how often — will I be updated on the loan’s progress?
  • What is the average loan processing time?
  • Do I have to sign all the paperwork in person?
  • What do I need to bring to the closing table?
  • How often will you communicate with me after the loan closes?
  • Who will service my loan? 
  • Will you sell my loan?
Also, if you are considering an Adjustable Rate Mortgage.
  • What is the margin on the loan program?
  • What index is being used for the loan program?
  • How much higher can my interest rate and payments go when the mortgage first adjusts?
  • After the first adjustment, exactly when, and how often, could my rate and payment adjust?
  • What is the most my interest rate and payment could increase?