What do you call a person who is the lender in a mortgage?

To ensure that housing loan borrowers do not circumvent loan-to-value (LTV) limits and total debt servicing ratio (TDSR) thresholds, financial institutions (FIs) need to ensure the following requirements are met:

• A borrower named on a residential property loan must also be the mortgagor of that property.
• If a borrower's TDSR exceeds the threshold, any person standing guarantee for the loan has to be brought in as a co-borrower.

Borrower-Mortgagor Requirement

A borrower named on a residential property loan is required to also be the mortgagor of that property. FIs should verify that the borrower is listed as:

• A purchaser on that property’s Option to Purchase form.
• A mortgagor on that property’s Land Titles Act mortgage document.

This requirement applies to any loan for the purchase of residential property in which the OTP was granted on after 29 June 2013, or any re-financing of such a loan.

Note: This requirement does not apply if the housing loan is not secured on the property being financed.

If a borrower is unable to meet the TDSR threshold of 60% on their own, another individual may be brought in to assist them in servicing the loan.

This person will be considered a co-borrower rather than a guarantor, and lower LTV limits will apply to their future housing loan applications.

This requirement applies to:

• Any loan for the purchase of residential property in which the OTP was granted on after 29 June 2013, or any refinancing of such a loan in certain situations.
• Any loan otherwise secured by residential property, if the application date was on or after 29 June 2013, or any refinancing of such a loan in certain situations.

Note: For mortgage equity withdrawal loans, the guarantor borrower requirement applies only in certain situations.

Before you sign any loan contract - whether it is for your own loan or for a friend’s loan - always read the contract very, very carefully and make sure you understand exactly what your role and obligations are. Here is a simple explanation of what some of the roles might be: 

Borrower: The person who is borrowing money from a bank, money lender or financial institution. Typically, the borrower signs a contract and agrees to certain repayment terms. This person might also be known as the ‘principal borrower’, meaning the person who has borrowed the ‘principal’ or main loan amount.

Guarantor: If you are a guarantor on someone else’s loan, you are promising to the lender that you will repay the borrower’s loan if the borrower does not repay. If you sign as a guarantor on a loan contract, that is legally binding. Only agree to be a guarantor if you can afford the risk. 

Reference: A reference is considered to be just an introduction to the borrower, like a character reference. Referees should not be subject to what is written in the legal agreement. There should not be any obligation to repay someone else’s loan just by being a referee. If you are a referee and have not signed as a guarantor, and if you are being contacted to repay someone else’s loan as though you were a guarantor, you can be very clear and say that you have no legal obligation to pay. 

Witness: Technically, a ‘witness’ is meant to provide confirmation that a contract or transaction has taken place; for a loan contract, a ‘witness’ should not be expected to pay the loan amount  if the borrower cannot repay the loan. However in Hong Kong, money lenders often illegally use the term ‘witness’ in Bahasa Indonesia to refer to either a ‘guarantor’ or ‘reference’. Be cautious of signing a loan that uses this term. Before signing, clarify exactly what the obligations are - specifically whether you will be accountable to pay the loan if the borrower cannot. Be cautious of agreeing to be a ‘witness’ on the phone. If you have not signed someone else’s loan as a guarantor, you are not legally obliged to repay it as a ‘reference’ or ‘witness’.

Your loan servicer typically processes your loan payments, responds to borrower inquiries, keeps track of principal and interest paid, manages your escrow account (if you have one). The loan servicer may initiate foreclosure under certain circumstances. Your servicer may or may not be the same company that originally gave you your loan.

Tip: To find out who your servicer is, check your monthly mortgage statement or payment coupon book. If you can’t find a statement or coupon, you can try the MERS® Servicer Identification System toll-free at (888) 679-6377 or visit the MERS® website . MERS is a private company that maintains information about mortgage loans and servicers. Your loan servicer’s identity may be listed in the MERS system.

LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.

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LendingTree is compensated by companies on this site and this compensation may impact how and where offers appears on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.

Written by

Denny Ceizyk

Edited by

Crissinda Ponder

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It may not have been reviewed, commissioned or otherwise endorsed by any of our network partners.

A mortgage loan officer is a licensed representative of a mortgage broker, mortgage bank, credit union or institutional bank who helps consumers apply for a home loan, and offers or negotiates the terms of a home loan for a fee. Banking regulators call them “mortgage loan originators,”  and their primary role is to match your financial profile to a mortgage at the best rates and lowest costs.

What is a loan officer?

In general terms, a loan officer is employed by a financial institution to generate loans and assist customers with the paperwork needed to complete a loan application. There are loan officers that help people obtain car loans, personal loans and business loans. However, mortgage loan officers are exclusively licensed to originate financing for residential homes. They must meet a minimum education requirement, pass a national test to become licensed and take continuing education classes annually to renew their license.

What does a loan officer do?

A loan officer’s job description varies from lender to lender. However, most mortgage loan officers are responsible for the following tasks:

Vetting the information on your loan application. The Uniform Residential Loan Application (URLA) form is divided into nine sections, and it’s the loan officer’s responsibility to spot any inconsistencies or missed questions to avoid delays and confusion.

Collecting documents to support your loan request. A good loan officer knows what documents to request — whether it’s tax returns for a self-employed borrower or letters of explanation for credit blemishes — to speed up and maximize your odds of approval.

Helping you negotiate the best mortgage program terms based on your finances. An experienced loan officer is well-versed in the guidelines, closing costs and interest rates of a wide variety of loan programs offered by lenders they work for. They’ll answer questions you have about different types of mortgages, and explain why the program they’re recommending is a good fit for you. They’re also responsible for providing a loan estimate three business days after you apply for a loan, and a closing disclosure three business days before you close.

Tracking deadlines and helping you close your loan. Loan officers track important milestones to ensure you close by your contract closing date when you’re buying a home. They also keep an eye on your mortgage rate lock expiration date, so you don’t end up paying expensive extension or relock fees.

Mortgage broker vs. loan officer: What’s the difference?

A mortgage broker is a licensed financial service provider that works with multiple lenders to find the best interest rates and loan programs. A broker acts as an intermediary between the borrower and several lenders, but the mortgage brokerage company doesn’t actually provide the money for the loan.

A loan officer typically works for one lender, which means they are limited to the products that a particular lender offers. A loan officer may work for a mortgage bank, credit union or institutional bank, and their employer can provide the funds for a home loan directly to a borrower.

How do I find the best loan officer near me?

There are many different ways to choose a loan officer that meets your mortgage needs. Before you start your search, here are eight tips to make the process easier.

Ask a friend or family member. If someone you know recently bought a home and had a good loan experience, ask them to pass the name and phone number on to you.

Use an online lender. Many lenders offer websites with mortgage and homebuying information to get you acquainted with basic mortgage terminology. Most offer an online application link where you’ll be connected with a loan officer once you complete the application. 

Get a referral from your real estate agent. Real estate agents often work with “preferred” loan officers who have a reputation for reliably closing loans on time. Some real estate companies station an “in-house” loan officer in their offices to prequalify their buyers before showing homes.

Ask a housing counselor. Check the U.S. Department of Housing and Urban Development’s (HUD) website for a list of housing counselors in your area. HUD-certified counselors may be able to recommend a local reputable lender.

Go to your local bank. Most banks offer home loans, and some even offer lower interest rates if you keep a significant amount on deposit. Loan officers generally work in bank branches, making it convenient to meet them while you’re doing your regular banking.

Find a local mortgage bank or mortgage broker. If you Google “mortgage banks or mortgage brokers in my area,” you’ll probably find plenty of mortgage company and loan officer websites to choose from. Mortgage brokers may even have access to special “non-qualified” mortgage programs for unique credit or income challenges.

Have questions prepared for each loan officer you meet. Besides the obvious questions about getting the best rates and fees, you’ll want to have a list of questions handy to get a feel for the loan officer’s experience and knowledge. You’ll learn a lot about the loan officer by asking:

• How much experience do you have? A loan officer with a lot of years of experience can be a great ally if you have a rocky credit history or complicated tax returns. They can also handle the communications between a number of different people involved in your loan closing so the process is as smooth as possible.
• What are your work hours? Many people look at homes after work and on weekends, which means you need a loan officer who’s available, especially if you live in an area where real estate is booming. If you find your dream home late one night after looking at houses all day, you’ll need a mortgage preapproval quickly to compete — most sellers won’t even consider a purchase offer without a preapproval.
• How will we be communicating during the loan process? Texts and emails have become common, but loan officers should also be available by phone if something urgent arises, or you need to talk through an issue that comes up or something that you don’t understand.
• Why should I choose your company? Look for answers beyond low rates, competitive costs and great service. Listen for special products like 14-day closings, rate locks available before you’ve found a house or special down payment assistance programs, to see if any of these niches serve your specific needs.

Meet at least three to five different loan officers. Studies have shown that borrowers who shop with at least three to five lenders typically save thousands of dollars on their loan costs. However, make sure you get along with the loan officer since you’ll typically work with them for several weeks to months.

FAQs about loan officers

What is a mortgage loan originator?

A mortgage loan originator, or MLO for short, is the regulatory name for a loan officer. You can check your loan officer’s license status by using the Nationwide Mortgage Licensing System (NMLS) consumer access site and entering their six-digit NMLS number.

What is a mortgage banker?

A mortgage banker typically offers the mortgage products of one lender, with the entire loan process — from application to funding — handled in-house. Mortgage bank underwriters often have special authority to approve loans that mortgage brokers or institutional banks can’t.

How do loan officers get paid?

Federal law requires that lenders pay loan officers a flat fee or a preset percentage of the loan amount for their services. Loan officers aren’t allowed to make an extra fee based on the terms of the loan, including the interest rate or loan type.

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