Homeowners everywhere know what it’s like to be a house hunter, searching for the best combination of curb appeal, space, schools and price. But mortgage hunters are something else entirely.
A mortgage can be tough to get, depending on the housing market, economic climate and an applicant’s credit score, so it might seem that mortgage hunting is a part of the house-hunting process.
Nope. It’s the potential home loans that are being hunted.
Mortgage companies, particularly independent ones, sometimes hire mortgage hunters to market the company and generate leads, according to a post on National Mortgage News. Loan officers at those companies then follow those leads with the intention of originating the mortgage.
“Being a good hunter is important,” Garth Graham wrote in that post, “but the best originators are also very good at converting those leads, or making the kill, when they have the chance.”
The Mission of a Mortgage Hunter
How lenders compensate loan officers varies by institution, but they earn commission on the mortgages they originate. As a step toward preventing another housing collapse, the Consumer Financial Protection Bureau regulated terms of loan officer compensation following the financial crisis (for instance, an officer cannot receive higher compensation for mortgages with high interest rates, which previously motivated officers to distribute high-risk loans).
For those seeking a home loan, it could be great to know banks want your business, but it’s important to go into these deals understanding your financial situation and confidently discussing the terms of the loan, including how much you’ll pay to originate the loan.
For this reason, consumers should know where they stand among their peers, which is easy to do using the insights provided by Credit.com’s free Credit Report Card. It’s also crucial to review your free annual credit report before looking for a home, not only to catch any mistakes, but also to be familiar with the information lenders will consider when deciding whether to originate a mortgage for you.