We are independent & ad-supported. We may earn a commission for purchases made through our links.
Advertiser Disclosure
Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.
How We Make Money
We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently of our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.
Finance

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

What is a Mortgage Originator?

By Christy Bieber
Updated: May 16, 2024
Views: 6,902
Share

A mortgage originator is the entity that facilitates the origination of a mortgage loan. A mortgage loan is originated when the borrower and the bank sign the loan documents and settlement and when the borrower is issued the check to be paid to the person from whom he is buying the home. A mortgage originator can be a mortgage banker at a bank or can be an independent mortgage company who helps a client finance a home purchase.

There are several major types of mortgage loans: a first mortgage, a second mortgage or home equity loan, a mortgage refinance or a construction loan. A mortgage originator can be involved in helping to facilitate each type of loan. A first mortgage is generally used to buy an existing home, while a second mortgage may be used to provide additional funds to buy the first home or may be used to tap into the equity of a house and get cash out. A refinance is used to pay off an existing mortgage to change the terms of that mortgage. A construction loan is used to finance the building of a new home.

When a person applies for a mortgage, that individual must meet certain criteria. The mortgage originator will help the borrower determine what criteria must be met and will evaluate to ensure the individual completed the requirements. For example, an individual will generally need to provide proof of income in the form of tax returns, as well as information about his credit in the form of his Social Security number that is used to pull his credit score.

The bank or lender will usually evaluate the information to determine whether a person can qualify for a mortgage. The lender may also appraise the home or property to determine if it is sufficiently valuable to act as collateral for the loan that is being granted. The mortgage originator — whether a bank, a third party lender, or a mortgage brokerage house — is usually responsible for completing these steps to ensure the mortgage application should be granted and the mortgage is a wise investment for the bank or lender to make.

There are several types of mortgage originators a person can use to borrow money. Banks originate mortgages and the client works with the banker. Third party or mortgage brokerage firms also originate mortgage loans. A mortgage broker can help a client decide which mortgage origination company is best suited to his needs.

Share
SmartCapitalMind is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Discussion Comments
By Markerrag — On Oct 08, 2014

@Terrificli -- An originator who deals with national companies in the secondary market might have some more options when it comes to mortgages.

They might have some products available for people with less than stellar credit, for example. That's not to say the local folks can't be competitive, but there are some advantages in going with originators who deal with national companies. Compare the products offered by originators dealing with both local and national servicers and see which ones have the best products for you.

By Terrificli — On Oct 07, 2014

When deciding on which mortgage originator to use, make sure you know if the financial institution he or she works for services their own loans or sells them in the secondary market. That can make a big difference.

If you go with a local institution that services its own mortgages, then you will deal with that bank whenever you have any issues about your home loan pop up. If you deal with one that sells mortgages into the secondary market, you will probably have to deal with a large, national company that services your loan and that can mean you might not get the personal service you want.

Most people, I suspect, don't care one whit about whether their loans are serviced locally or by a national company. Some people care a great deal about that, however.

Share
https://www.smartcapitalmind.com/what-is-a-mortgage-originator.htm
Copy this link
SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.

SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.