Mortgage Processor Defined, Plus How To Become One
Victoria Araj5-minute read
May 11, 2021
A mortgage processor, or loan processor, is responsible for assembling, administering and processing your loan application paperwork before it gets approved by the loan underwriter. They play a key role in getting your mortgage loan request to the final close. A mortgage processor acts as the middleman between the loan officer and underwriter.
About 26% of home buyers cite paying down debt as the largest struggle when it comes to affording their first home. If you’re currently planning on buying a home or you’re in the process of doing so, it’s important to know what the responsibilities of a mortgage processor are and what they will provide during these crucial steps.
Table of Contents:
What Is A Mortgage Processor?
A mortgage processor, also known as a mortgage loan originator or loan processor, sets up the borrower with the proper documents for the loan program they want to use. They guide the borrower through the first step of loan processing. Once the paperwork is finalized, the mortgage processor then passes it through to the underwriter.
What Does A Loan Processor Do?
The main benefit of a loan processor is that they are there to help streamline the process of applying for a home loan. The steps can be quite complex, but the loan processor helps you find the right loan for your budget and needs.
Here are some of the core things a mortgage processor does:
- Collects financial documents: Collecting and ensuring financial documents are in order is the most important duty a loan processor has. This step includes confirming that the correct documents are present and that they include the accurate information needed for the underwriter. They compile documentation that includes tax returns, W-2s, salary income, proof of insurance and evidence of assets and debts.
- Analyzes credit report: Loan processors order and analyze your credit report by looking for any inaccuracies, late payments and collections. From there, they collect letters of explanation from you for further understanding. Having a good credit score increases your likelihood of getting approved for a home loan. The loan processor looks to see how you’ve handled paying past bills to confirm you’ll be able to pay off future mortgage payments.
- Tracks the borrower’s deadlines: Your processor keeps track of certain deadlines of your mortgage application timeline to ensure you close on your house on time and avoid any unnecessary fees. The timeline includes finding a home and making an offer, home appraisal and completing the mortgage underwriting and final approval.
- Works with loan underwriter: Loan originators work directly with the underwriter to finalize the application process. They are responsible for transitioning all of the correct compiled documentation to the underwriter for final approval.
Loan Processor Vs. Underwriter
Although both the loan processor and the underwriter are involved in the mortgage application process, the two roles have separate duties. The loan processor makes sure you have all of the proper documentation organized to apply for the loan. The underwriter’s role is to analyze whether you’ll be able to make the necessary monthly mortgage payments and decide if the loan will be approved.
These three key positions work together when pushing a mortgage loan request through, each with a unique set of responsibilities.
What Is A Mortgage Loan Officer?
A mortgage loan officer and a mortgage processor are often confused for the same position. However, they hold separate responsibilities in the loan application process. A mortgage loan officer is a licensed mortgage expert who helps navigate the borrower through the loan application process.
The loan officer will recommend the type of mortgage loan program that fits the financial needs of the borrower. Once the borrower decides on the type and size of the loan, this information is passed on to the mortgage processor who then files the paperwork.
What Is A Mortgage Underwriter?
A mortgage underwriter is a financial expert who assesses whether or not the borrower should be approved for the loan they applied for. An underwriter will sift through your assets, credit reports and the size of the mortgage loan you’re requesting. They’ll analyze the documentation organized by the mortgage processor to determine loan approval.
How To Become A Loan Processor
The key to becoming a loan processor is developing a skill set that is both diversified and works well in the financial industry. Gaining as much experience as possible through on-the-job training sessions and online financial courses will set you up to be more of an appealing hire.
Step 1: Earn a high school diploma. This is usually a minimum educational requirement at many loan companies.
Step 2: Earn a higher level degree. It’s highly recommended to graduate with at least an associate’s degree in a related subject, like finance, banking or business. This allows you to have the basic concepts of financial management and banking practices down.
Step 3: Receive your Mortgage License. You will need to take the NMLS Mortgage Education pre-training and pass the Mortgage License National Test1 to receive your mortgage license. This process will depend on the state that you reside in.
Step 4: Obtain employment. To become a loan processor, you will want to start working at places like credit unions, mortgage lenders and banks. From there you will want to receive on-the-job training. It is recommended to obtain computer software, communication and information processing skills.
Step 5: Work your way up. The longer you stay in the field, the easier it will be to advance upwards in financial positions.
The salaries listed below do not represent salary estimates from Rocket Mortgage® and were pulled from the Bureau of Labor Statistics for educational purposes only.
Mortgage Processor Salary
The median salary of a mortgage loan processor is $40,598 per year, according to the National Association of Mortgage Processors.2 Your salary will depend on the location and the amount of experience you have in your position.
Loan Officer Salary
The average salary of a mortgage loan officer is reported at $63,960 per year or $30.75 per hour, according to the Bureau of Labor Statistics.3 Your salary will depend on the location and the amount of experience you have in your position.
Before working with a mortgage processor, apply for mortgage preapproval to understand what you can afford when you buy a home. Mortgage approval provides you with mortgage options and prepares you for the loan application process whether you’re buying your starter home or an investment property.