Loan Officer
Employees of lenders or mortgage brokers who find borrowers, sell and counsel them, and take applications. Loan officers employed by mortgage brokers may also be involved in loan processing. In the case of a one-person mortgage broker firm, that person is both the broker and the loan officer. While loan officers are employees, they act more like independent contractors. They are compensated largely, if not entirely, on a commission basis. The typical commission rate is 1/2 of 1% of the loan amount, and successful loan officers earn six figure incomes. Both lenders and mortgage brokers post prices with loan officers to be offered to consumers. The loan officers usually have limited discretion to reduce the price if necessary to meet competition, and full discretion to raise the price if they can. The difference between the posted price and the price charged the consumer is called an Overage, and the loan officer usually gets a share of it.
Popular Mortgage Terms
A provision of a loan contract stipulating that if the property is sold the loan balance must be repaid. A mortgage containing a due-on-sale clause is not assumable. This prevents a home ...
Points paid by a lender for a loan with a rate above the rate on a zero point loan. For example, a lender might quote the following prices: 8%/0 points, 7.5%/3 points, 8.75%/-2.5 points. ...
An option attached to a mortgage, which allows the borrower to pay only the interest for some period. A mortgage is 'interest only' if the monthly mortgage payment does not include any ...
Adjustable rate mortgages on which the interest rate is mechanically determined based on the value of an interest rate index. Indexed ARMs are distinguished from Discretionary ARMs, in that ...
Insurance provided the lender against loss on a mortgage in the event of borrower default. In the U.S., all FHA and VA mortgages are insured by the federal government. On other mortgages, ...
A charge imposed by the lender if the borrower pays off the loan early. The charge is usually expressed as a percent of the loan balance at the time of prepayment or a specified number of ...
Same as term Qualification: The process of determining whether a prospective borrower has the ability to repay a loan. ...
A government-owned or -affiliated lender that makes home loans directly to consumers. With minor exceptions, government in the U.S. has never loaned directly to consumers, but housing banks ...
A mortgage that does not meet the purchase requirements of the two federal agencies, Fannie Mae and Freddie Mac, because it is too large or for other reasons, such as poor credit or ...
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