Definition - What does Loan Officer mean?
Generally employed by financial institutions and banks, a loan officer’s primary responsibility is to approve loan applications. Loan applications can include commercial real estate loans, consumer loans for personal property and mortgage loans.
Although there is a wide variety of knowledge and skills required to succeed as a loan officer, strong interpersonal communication and sales ability, as well as a high degree of knowledge of finance and economics, are generally required.
The current median annual income for a loan officer is $40,846, although the range can vary from $33,543 to $50,549. The Federal Secure and Fair Enforcement for Mortgage Licensing Act of 2008 requires that mortgage loan officers are licensed by the state. There are also pre-licensing education requirements as well as mandated credit and background checks.
Justipedia explains Loan Officer
The loan officer is required to meet with loan applicants, answer their questions and determine whether the applicant qualifies for the loan. Prior to approving the loan, the loan officer must determine creditworthiness by evaluating the applicant’s financial status and credit history.
Loan officers must also have a strong knowledge of all current loan options available and which type of loan is best suited to the loan applicant. Loan officers may need to research lenders to determine which lenders are offering the lowest possible loan rates. Part of their job may also include promoting different loan options or financial services to their clients.
After the applicant’s creditworthiness is determined and the loan product has been chosen, the loan officer is responsible for working with their team to gather all necessary financial documents for the loan approval process. If the applicant does not have a strong financial history, the loan officer may also help recommend solutions to improve their financial eligibility.
Finally, a loan officer is the primary liaison between the lender and the loan applicant, and can facilitate communication between the two parties.