A mortgage loan is a loan secured by real property through the use of a mortgage a legal instrument. However, the word mortgage alone, in everyday usage, is most often used to mean mortgage loan. A home buyer or builder can obtain financing a loan either to purchase or secured against the property from a financial institution, such as a bank, either directly or indirectly through intermediaries. Features of mortgage loans such as the size of the loan, maturity of the loan, interest rate, method of paying off the loan, and other characteristics can vary considerably.

Loan Officers Significant Points About 9 out of 10 loan officers work for commercial banks, savings institutions, credit unions, and related financial institutions. Earnings often fluctuate with the number of loans generated, rising substantially when the economy is good and interest rates are low. Nature of the Work For many individuals, taking out a loan may be the only way to afford a house, car, or college education. For businesses, loans likewise are essential to start many companies, purchase inventory, or invest in capital equipment. Loan officers facilitate this lending by finding potential clients and assisting them in applying for loans. Loan officers also gather personal information about clients and businesses to ensure that an informed decision is made regarding the creditworthiness of the borrower and the probability of repayment. Loan officers may provide guidance to prospective loan applicants who have problems qualifying for traditional loans. The guidance may include determining the most appropriate type of loan for a particular customer and explaining specific requirements and restrictions associated with the loan.

Loan officers usually specialize in commercial, consumer, or mortgage loans. In many instances, loan officers act as salespeople. Commercial loan officers, for example, contact firms to determine their needs for loans. If a firm is seeking new funds, the loan officer will try to persuade the company to obtain the loan from his or her institution. Once the initial contact has been made, loan officers guide clients through the process of applying for a loan. Loan officers answer questions about the process and sometimes assist clients in filling out the application. Loan officers then decide, in consultation with their managers, whether to grant the loan. If the loan is approved, a repayment schedule is arranged with the client. For example, when lending money for a college education, a bank may insist that borrowers offer their home as collateral. If the borrowers should ever default on the loan, the home would be seized under court order and sold to raise the necessary money. Banking, lending, or sales experience is highly valued by employers. Most employers also prefer applicants who are familiar with computers and their applications in banking. Personal qualities such as sales ability, good interpersonal and communication skills, and a strong desire to succeed also are important qualities for loan officers.

There are currently no specific licensing requirements for loan officers working in banks or credit unions. Training and licensing requirements for loan officers who work in mortgage banks or brokerages vary by State. Association, offers the Loan Review Certificate Program for persons who review and approve loans.

This program enhances the quality of reviews and improves the early detection of deteriorating loans, thereby contributing to the safety and soundness of the loan portfolio. To obtain the CMB, the candidate must have 3 years of experience, earn educational credits, and pass an exam. Employment Loan officers held about 291,000 jobs in 2004. About 9 out of 10 loan officers were employed by commercial banks, savings institutions, credit unions, and related financial institutions. Loan officers are employed throughout the Nation, but most work in urban and suburban areas. At some banks, particularly in rural areas, the branch or assistant manager often handles the loan application process. Job Outlook Employment of loan officers is projected to increase more slowly than average for all occupations through 2014. College graduates and those with banking, lending, or sales experience should have the best job prospects.

Internet to apply for and obtain loans. Job opportunities for loan officers are influenced by the volume of applications, which is determined largely interest rates and by the overall level of economic activity. However, besides openings arising from growth, additional job openings will result from the need to replace workers who retire or otherwise leave the occupation permanently.

The use of credit scoring has made the loan evaluation process much simpler than in the past and even unnecessary in some cases. In addition, the mortgage application process has become highly automated and standardized, a simplification that has enabled online mortgage loan vendors to offer their services over the Internet. Online vendors accept loan applications from customers over the Internet and determine which lenders have the best interest rates for particular loans. With this knowledge, customers can go directly to the lending institution, thereby bypassing mortgage loan brokers. Shopping for loans on the Internet is expected to become more common in the future, especially for mortgages, thereby reducing demand for loan officers.

Although loans remain a major source of revenue for banks, demand for new loans fluctuates and affects the income and employment opportunities of loan officers. When the real estate market slows, loan officers often suffer a decline in earnings and may even be subject to layoffs.

The same applies to commercial loan officers, whose workloads increase during good economic times as companies seek to invest more in their businesses. In difficult economic conditions, an increase in the number of delinquent loans results in more demand for loan collection officers.

Median annual earnings in the industries employing the largest numbers of loan officers in 2004 were as follows: The form of compensation for loan officers varies. Most are paid a commission that is based on the number of loans they originate. In this way, commissions are used to motivate loan officers to bring in more loans. Some institutions pay only salaries, while others pay their loan officers a salary plus a commission or bonus based on the number of loans originated.

Banks and other lenders sometimes offer their loan officers free checking privileges and somewhat lower interest rates on personal loans.

Earnings of loan officers with graduate degrees or professional certifications are higher. Sources of Additional Information Information about a career as a mortgage loan officer can be obtained from: Mortgage Bankers Association, 1919 Pennsylvania Ave. Also, individual banks can supply information about job openings and the activities, responsibilities, and preferred qualifications of their loan officers. Repayment of the loan is deferred until the borrower is no longer living in the home. In a typical mortgage, a home owner pays a monthly amortized amount; after each payment, the owner has more equity in the house. After a certain amount of time, the mortgage will be paid in full and the property released from the debt. In a reverse mortgage, the home owner pays nothing each month and all interest on the debt is added to the lien on the property. If the owner receives monthly payments, then the debt on the house increases each month. Reverse mortgages in the United States Requirements To qualify for a reverse mortgage in the United States, the borrower must be at least 62. There are no minimum income or credit requirements, and for most reverse mortgages, the money can be used for any purpose. Reverse Mortgage is, and what the process of obtaining one is.

Reverse mortgages are offered by some state and local governments. The majority of reverse mortgages are FHA insured. The location of the home may also have an impact. There is also a type of reverse mortgage for homes valued over the maximum Fannie Mae limit.

Social Security or Medicare benefits.

Costs The cost of getting a reverse mortgage from a private sector lender exceeds the costs of other types of mortgage loans from such a lender. There is an insurance premium of 2 percent of the loan and a 2 percent origination fee in addition to normal closing cost. 8,000 in costs beyond the normal closing costs, which are typically some thousands of dollars. 30 that is usually added to the total amount of the loan. The lowest cost reverse mortgages are offered by state and local governments. They generally have low or no loan fees, and the interest rates are typically low or moderate as well. But, as noted above, they often have many restrictions, and many states dont have such programs at all.

At that point, the reverse mortgage can be paid off by the proceeds of the sale of the house, or refinanced by the heirs of the homeowners estate. It means that the lender does not have legal recourse to anything other than the value of the home when the loan is to be paid off. As of December 31, 2005 a total of 195,418 HECM loans had been issued since the programs inception in 1989. However, program growth in recent years has been very rapid. 2006, an 83 percent increase over the 30,404 loans endorsed during the same period in the prior fiscal year. Section 255 of the National Housing Act, which governs the HECM program, limits the aggregate number of outstanding HECMs to 250,000. Efforts are currently underway to remove or expand the cap on the number of HECM loans that can be issued. Other Options The biggest drawback with reverse mortgages are the high upfront costs.

Some seniors may want to consider other options to tap their home equity, particularly if they do not think they will remain in the home for at least five years. 10 years can be used. These payments can be made for several years by drawing on the line of credit itself.