You’re ready to buy the home of your dreams, and now it’s time to get the ball rolling on getting a mortgage. That’s where a mortgage loan originator comes into play. Here’s what loan originators do, and what you can expect while working with one during the home loan process.

What is a mortgage loan originator?

A mortgage loan originator (MLO) — sometimes just known as a loan originator — is an individual or entity integral to the initiation of a home loan. From first contact to preapproval to formal application and on through to closing, the MLO helps borrowers move through the mortgage origination process as smoothly as possible.

Mortgage loan originators can work for a bank, a credit union or other lending institution, large or small. Some are salaried, but many are compensated by commission.

Loan originator vs loan officer: What’s the difference?

You might hear the terms “mortgage loan officer” or “loan officer” (LO) used interchangeably with mortgage loan originator, but there is a slight distinction between the two. A loan originator can refer either to the entity or institution (lender) that initiates the loan, and also to the individual professional who works with you.

A loan officer strictly refers to the individual who helps you through the mortgage application process, ensuring that all documents are completed properly and submitted in a timely manner.

What does a mortgage loan originator do?

Mortgage loan originators help borrowers through the mortgage application process, from initial inquiry to closing. Their work can involve collecting your credit and financial information, assessing your needs and what loan options make sense for you, negotiating rates and submitting your application for underwriting.

While they act as your representative, it’s important to realize a mortgage loan originator won’t make the final decision on your loan application or how much money to lend you. That part is left up to the lender’s underwriting department, which evaluates your risk as a borrower.

Before a mortgage loan originator can help you through the financing process, though, they will need to convince you that working with them is your best option. Because of that, some loan originators can feel and act like salespeople.

Since 2008, loan originators have been subject to stricter state licensing and other requirements, including the mandate to act in the best interests of borrowers whenever possible. That said, you shouldn’t ever feel pressured by a loan originator to commit to a certain mortgage product without first understanding what the offer entails.

What are the licensing requirements for mortgage loan originators?

Becoming a mortgage loan originator requires either obtaining a state license or being federally registered as an MLO.

In order to obtain federal registration, the individual has to be an employee of a depository institution (or a subsidiary of a depository institution), or an employee of an institution overseen by the Farm Credit Administration. MLO federal registrations are recorded in the Nationwide Mortgage Licensing System and Registry (NMLS). You can visit the NMLS consumer database to confirm your MLO’s registration. A good MLO should provide you with their license and registration number right away.

State licensing requirements vary slightly, but typically involve providing fingerprints for an FBI criminal history background check, undergoing a credit report check, taking NMLS pre-licensure education courses and then passing an exam.

How to choose the right mortgage loan originator for you

When you’re seeking a mortgage, you have the ability to compare and choose between mortgage lenders and loan originators. It can be tempting to go with the first one you contact — you might even be impressed with the person’s offer or pitch. In fact, almost half of all homebuyers skip the rate-shopping process, according to a Freddie Mac study. Big mistake: Borrowers who don’t shop around before choosing a mortgage tend to miss out on better terms — mainly lower interest rates.

When talking to an MLO, be sure to get all the details: the loan’s interest rate, its APR, any and all fees and any additional perks or discounts. These will be key points  when you’re comparing mortgage offers and mortgage lenders.

If you run into a hard pitch, stand your ground. Politely request a quote and let the loan originator know you might circle back when you’ve reviewed all of your options. Although it can be an uncomfortable conversation to decline an offer or ask for more time, your mortgage is a significant financial commitment, and it pays to be thorough.

It’s also important that you can envision working well together with this person. If you can’t understand what they say (or vice versa) or feel uncomfortable asking them questions, then they’re likely not the right fit. Discuss the loan originator’s communication style — will you regularly hear from them with status updates? — and confirm that it meets your preferences.

Ultimately, the right mortgage loan originator will have your best interests in mind, and create a smooth application and closing experience for you.