A bag of cash and a bag representing risk on a scale

The Difference Between Loan Officers and Underwriters

Buying a home is a major investment, and the process includes several important stages along the way. While there are many different people you work with along the way, many people confuse loan officers with underwriters. While you have to work with a loan officer at the beginning of the process in order to get pre-approved and secure a loan, underwriters are the ones behind the scenes that help push your loan to the finish line. To help you better understand the difference and key responsibilities of loan officers and underwriters, we’ve broken it down below.

What is the main difference between what loan officers and underwriters do?

A loan officer is the first point of contact and primary contact throughout the loan process for clients. Loan officers are experts in the loan products their bank or financial institution offers so they can guide clients towards the best loan for them. Loan officers are also responsible for gathering financial information from clients, tracking credit and loan data, determining payment schedules, and providing stellar customer service every step of the way. The main job of an underwriter is to assess the risk of the loan for the lender. They are experts in government regulations and are meticulous in analyzing the loan documents to ensure no stone is left unturned. Underwriters take a detailed dive into the personal financial paperwork provided by buyers like bank statements, payroll documents, tax returns, and more. Essentially, the key difference between a loan officer and underwriter is that the loan officer assumes all finance risk by providing the loan and the underwriter determines the value of that risk for the lender.

What key job responsibilities are different?

Even though loan officers and underwriters work closely together, their roles and responsibilities are different and are each critical to the process as a whole. A loan officer is responsible for gathering all financial information from the borrow, knowing and being able to recommend the loan products they work with, determining payment schedules after a loan has been approved, providing customer services to clients every step of the way, and tracking key metrics like credit scores and loan data to ensure everything is good to go. Underwriters on the other hand are responsible for a lot more of the behind-the-scenes tasks. These include following all regulations set by the government, analyzing all the documents carefully and thoroughly that the lender has gathered from the borrower, analyzing the financial situation of the lender and borrower, and more. While training is required for both jobs, Knowledge Coop states that underwriters and assistants who are not involved in offering or negotiating loans may not be required to obtain a license while loan officers will always need a license.

What exactly is underwriting?

Underwriting is a key step during your home buying journey that essentially helps lenders determine if they are making a sound investment. Throughout the process of finalizing a loan, underwriters are tasked with assessing the degree of risk that lender or bank will face with the loan so they can set fair and reasonable terms. In order to ensure the loan is a good one to move forward with, underwriters sift through each and every document to confirm that the file meets all the requirements, and the borrower has adequate ability to repay the mortgage. Once a loan has been underwritten successfully it can then be approved and finalized and the home buying journey can come to a close.

Click here to request more information about the VA Home Loan
Start with an Instant Prequalification.


MHS Lending

Since working with a loan officer is often one of the first steps you’ll need to take when starting the process of buying a home, it’s important to work with someone you can trust. If you are a veteran or actively serve in one of the branches of the US Military and are looking to take advantage of the VA Loan, MHS Lending is here to help. Click here to meet our team of talented and experienced loan officers and give us a call today to get started!