For a person to be able to move around the mortgages, you must know who is supposed to do what in the mortgage world, there are two parts of three; one being lenders and loan officers. Although they have equally essential impacts on the loaning process, their tasks and functions are completely dissimilar.
1. Lender:
The lender usually implies a bank, or other entity whose business involves loans to borrowers including mortgage financing for real estate purchase. Financial institutions have the capital to offer loans and their credibility allows them to provide lending services with a wide range of products for borrowers. They underwrite loans, or determine how much a borrower can borrow based on the risk to lend to that person; they also decide whether an application for funds is approved.
CATEGORY | LENDER | LOAN OFFICER |
| Role | Provides the funds | Facilitates the loan process |
| Authority | Sets terms and approves loans | Guides borrowers and gathers documentation |
| Risk | Assumes risk of borrower default | No direct financial risk |
| Employment | Financial institution | Employee of the lender |
| Decision-making | Determines loan programs and guidelines | Works within the lender's guidelines |
2. Loan Officer:
The loan officer differs significantly from a clerk because he or she acts as an agent who coordinates the loaning process between lenders and borrowers. They are employed by the lending institutions and as such help clients with different needs get the best loans available from their employers or when working in banks and mortgage firms, they assist borrowers to make most of what is offered to them.The loan officers help in guiding borrowers with regards to application documents, the gathering of necessary paperwork as well as financial figures assessment also serving them with an ability to explain loan preferences and its conditions. They help the borrowers and lenders to create amalgamation in communication, resulting in reduced rate of withholding an undue process.
→ Read more: mortgage loan officer salary
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→ Read more: how much does a loan officer make on a mortgage?
