We'll give you the average profile of a loan officer working for a mortgage broker. Knowing this may give you an insight on the guy that has your life savings in his/her hands. The average loan officer:
- Has no college degree, may never have finished high school.
- Makes about $1,500/month (about $500/loan) for which they typically work like dogs. Spends their day getting rejected while looking for business: visiting real estate offices, cold calling customers, going to banks looking for rejected loans, sending out mailers.
- Gets viciously yelled at by borrowers, title companies, realtors, builders, underwriters, and his/her boss. This is part of the day, no matter how good a loan officer is.
Loan Officers are are heavily involved in one of the biggest purchases a person makes in a lifetime, and everything about the deal looms large and frightening for the borrower. Mild mannered people turn in to screaming monsters if anything goes wrong, and there are so many things that can hold up a loan. It's not a fun business, it's stressful, hard work, and it's a good day if no one gets upset with the loan officer. Have a heart for these guys. And also realize that most of them don't respond to yelling, hysterics or threats. It's nothing new to them and will only get you an increase in loan fees as compensation for your abuse or get you terrible service. They're people, too.
If you have less than perfect credit or a tough situation, the loan officer specializing in these non-conforming loans knows he or she will work harder for this deal and will either:
a) hope you will be impressed enough to send many referrals in the future, or
b) charge you more money.
Guess which one they will usually pick? The loan officer sees an opportunity to make a little extra income. Remember the real costs involved in doing a loan.
You should keep in mind that if you can't get an 'A' loan, the loan officer may only be able to find a loan for you which is certainly higher in interest rates, and possibly in fees, too. There are special loans for non-conforming situations.
Especially with tough or non-conforming loans, the loan officer may charge extra points to get the loan through. How much extra is their call (and yours; you can always walk away.) However, overcharging isn't the norm: Loan officers with clients who feel they've been overcharged don't get repeat business, the real money in this industry. Unfortunately, you still need to be careful about the guy who will shaft you. Desperate people can get taken because they'll do anything to get a loan.
If you think you're being overcharged, shop. Most brokers have access to the same products (meaning they can usually find and buy the same loans as other brokers), so call around and compare interest rates and fees, especially if you're not an 'A' loan. Don't believe the loan officer who tells you that you won't get a loan anywhere else. By shopping around, you can usually reveal who's trying to gouge you. Once you find the interest rate and fees you can live with, fill out an application at the broker's office, and lock the terms of the loan.
A broker is your only option when:
- you have less than perfect credit
- are self employed (and can't prove your income)
- just switched professions
- or have a high debt load
A bank is the best option if:
- you have top notch credit
- steady job/work history
- low debt loads
- are self-employed, but your last 2 years of income tax returns easily prove your income.