What Exactly Does A Loan Agent Do?

What Exactly Does A Loan Agent Do?

Author: Glenn Reschke

Obtaining a California home mortgage for your San Diego home loan or Bay Area home loan or Los Angeles home loans or San Francisco home loans or a Texas mortgage loan or a Midland mortgage has never been easier. A loan agent can make the process virtually transparent to the borrower as well as getting them the best rate possible.

It's a win/win for the borrower -- provided they get a good California home loan mortgage broker or agent. This page within this site will help to identify for you what the loan agent does and why it's a valuable service for you.

Home Loan Lending: Retail vs. Wholesale
If for no other reason, you should have loan agent broker your loan for you as they can get you a better interest rate and personalized loan program than obtaining one from your retail institution. Before I go into some of the specifics as to what a home loan lender broker does, you need to understand the wholesale and retail aspects of California home mortgage lending.

(These truths are also applicable to those outside of California.) When you walk into your local branch, and you see advertised a California home equity loan (HELOCs) or, dependent upon your area, San Jose home loans, Los Angeles mortgages, San Francisco home loans, or a San Diego mortgages, or just a California home mortgage in general, please be advised you'll pay the highest rates possible.

Or, in other words, retail interest rates. Just as if you walked into a grocery store and bought products off the shelf, which are retail priced goods, you'd be paying a higher interest rate. Conversely, if you guy goods at a wholesale club like Sam's Club or Costco, you'd be paying wholesale rates. Let me put as plainly as I can: would you rather pay 6.75% for your California home mortgage loan or would you prefer paying 6.25%?

This is a simple example but you can plainly see that 6.25% is lower than 6.75%. Loan agents can get you that 6.25% while you'll pay three-fourths more on your interest rate with a retail rate.

You might say, "Yea, but three-fourths more isn't that much higher." If you ask that, then you've never seen an amortization schedule. You would be paying a significant amount more due to that extra .75%. Obviously, you want the lowest rate possible -- your California home loan mortgage broker can get that rate for you. Your local bank has its own loan programs, and these programs are usually limited in scope and dimension.

In contrast, a broker can peruse a number of lenders and programs (for example, we have over 400 lenders we work with). With more selection comes better deals, better rates, or at the very least, a more customized loan program for your circumstances.

Home Loan Lending: So What Does a Loan Agent Do?
I could go into a great deal of detail here but most of it would confuse you and not serve your best interests. Due to that, let me give you the core and essential activities loan agents perform for you. Here are some of the key functions a loan agent performs for you:

1. Negotiates with lenders on getting you a preferred program
2. Analyzes your financial situation and loan components for optimum loan program selection, i.e., LTV, CLTV (where applicable), income, job history, debt ratios, credit worthiness, appraisal, etc.
3. Getting the best available loan for your particular situation
4. The broker can assist in cleaning up credit report problems and advise or counsel the client on this as well.
5. He/she shields you from the avalanche of lender conditions and deals with the hassle or satisfying the lender's conditions.
6. Write pre-approval letters to be faxed to your California real estate agent

Want more specifics you say? Okay, let's get even more specific. This list is comprehensive and covers the full gambit of what a good loan agent does for you.

• Interview the client (you) at the beginning of the loan process and inform client as to what is missing, if anything, from their loan packet. For example, asset statements, paystubs, copies of tax returns, W2s, etc.
• The loan agent will offer you scenarios or options as to what you prefer for your personal financial circumstances.
• The loan agent will select a loan program (after analyzing the unique aspects of your loan), consider any "adds" that lenders require to be tabulated with the broker's YSP or rebate, e.g., if the loan is cashout, if the LTV doesn't meet certain requirements, if debt ratios fall within a certain category, and then lock the rate with your approval.
• The California mortgage broker's loan processor will process the loan.
• The loan agent can and will pre-approval you with lenders by using their knowledge of the lender's online processes.
• Opens escrow
• Orders appraisal
• Sends out the Truth-in-Lending (Reg Z) document for your signature (this is required by law).
• Submits loan package to lender.
• Works conditional approval conditions from lender until loan reaches "full approval" status. To do this, the loan agent needs the borrower's help and will call and/or email them to send to them something the lender requires. The loan agent will do everything possible to avoid contacting the client about this but sometimes it is inevitable.
• Orders your loan documents for signing.
• Arranges signing with notary public and/or title officer
• Works post-signing funding conditions until satisfied.

As you can see, your loan does a lot so as to get your home mortgage loan approved and finalized. The best agents make the process as transparent and as painless for the borrower as possible. A loan agent can be an indispensible guide and resource for you in your home buying or refinance process.

Home Loan Lending: The Process -- What To Expect
When you contact a loan agent, this is how it will work. The home loan lender agent procures your contact information, email address, and phone number and forward it to the loan processor. She/he will then interview you for approximately 10-15 minutes asking specific questions regarding the loan process. She/he will then inform you as to what specific items we need from you to get the going.

Trust me -- this will save you a lot of time in the long run. It's better to get it all up front than in pieces here and there. The good loan agent then go to work for you in getting you the best loan program for your specific needs or desires.

Believe it or not, some loan agents will let the loan ferment for weeks before starting to work on it. My "trainer" actually did this quite routinely; although it was at the height of the refi boom and could get away with it, his lack of good customer relations skills caused him to lose many a client.

Glenn Reschke is a former loan agent. He has a bachelor's degree in English and a master's degree in Management. For more information on getting the best deal on your home loan, visit Look For A Great Mortgage Online.