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What Do I Need to Know Before Talking to a Mortgage Loan Officer? Feature Image
Posted on September 9, 2020 5 minute read

What Do I Need to Know Before Talking to a Mortgage Loan Officer?

What's in this article?

What does a mortgage loan officer do for you?
What information do you need to provide?
What should you expect?

You’re ready to take your first step toward buying a home and need to find a mortgage loan officer. But what exactly is their role, and how will they help you achieve this important milestone?

Your loan officer will guide you and answer your questions and concerns throughout the process. But before you reach out, you should collect and get familiar with your finances so you can be ready to answer the questions they will want to know to get a loan you can afford.

We’ve outlined what your loan officer will do for you and what information they will need so you can feel confident and prepared to start the process

What does a mortgage loan officer do for you?

Mortgage loan officers connect loan applicants and mortgage companies. They support you through the approval process from start to finish, beginning with collecting the required financial information and documents, verifying them, and interpreting the information to help you find the right type of loan.

How it works

Loan officers work with a team of professionals to achieve the end goal: closing the loan and getting you into your home. Their team includes underwriters and loan processors that each play a vital role in checking your information and preparing your application. But it’s the officer who will work directly with you to guide you through the process and assess whether your application will be approved.

How they can help

Loan officers have the latest industry knowledge to educate you on your decisions. They will take into account your finances and the current market condition and interest rates to help you find the most affordable loan.

But, they also need to know that giving you a loan is a good investment. This requires proof from you of your income and expenses.

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What information do you need to provide?

Credit score and proof of income

First, find out your credit score. Your loan officer will need to request your credit report and score to determine if you’re eligible and the interest rate you would pay, so you should get familiar with your score from the start. Scores range from 300-850, and a higher score means lower interest rates. If you have questions or concerns about your score, your mortgage loan officer can help you.

Loan officers also will need to see pay stubs from at least the past two to three months, your W2 tax forms, and any other source of income you have, including child support or commissions. They need to see that you are able to afford monthly mortgage payments. 

In addition to income, they will need to know your Debt-to-Income Ratio*, which is your monthly expenses divided by your gross monthly income. They likely will want to see bank statements and proof of other debts, such as credit cards or student loans.

*Debt-To-Income (DTI) ratio is monthly debt/expenses divided by gross monthly income

What can you afford?

Once you have a picture of your credit score and finances, you need to consider how much you can afford for a down payment. Down payments have a wide range, from 3% to 20% of the home’s price, so you will want to know your loan options first. Consider your savings situation and what you are comfortable with, and remember your loan officer can offer advice.

Lastly, your loan officer will want to know if you have any special circumstances that can make buying your home more affordable. This includes if you’re active duty or a veteran, or if you need a low down payment.

After digging into your finances and getting comfortable with what you find, you will be ready to talk to your loan officer and get started on your application.

What should you expect?

Homefinity’s professionals are here to help. You can start by either calling us or using our convenient online form to connect with us and start the application process.

  1. You will be asked basic questions about your credit score, what kind of home you’re planning to buy, when you plan on purchasing it, and more. 
  2. Using the financial information you collected, you will be able to answer your loan officer’s questions so they can learn about your specific needs, submit and monitor your loan application, and make recommendations on your loan options.
  3. If you’re concerned about getting approved due to your credit history, your loan officer can tell you your options and help you find solutions. Remember, even if you don’t feel like you have all of the pieces together, you still can reach out. Your loan officer is a trained professional and can offer guidance to get you where you need to be. Come with questions.
  4. Once your loan application is submitted, you will be updated at all points, and your loan officer will be available at any time to answer your questions about the process. 

Reach out to us today to get started so we can help you get into your new home.

Photo by Thought Catalog on Unsplash