How to become a Mortgage Loan Officer

How to become a Mortgage Loan Officer



Mortgage loan officers (MLOs) assist clients who want to buy a house in deciding which financial solutions are best for them. If you enjoy working with people and are interested in real estate, this might be a rewarding job. In this post, we’ll go over what a mortgage loan officer does, how to become one, and how much they make on average. 

A mortgage loan officer is a financial expert who assists clients in determining whether or not they are eligible for house loans. They also provide details on the many types of loans that are accessible as well as interest rates. These professionals, who are frequently employed by mortgage companies and banks, offer help and advice on house loans. 

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What are the steps to becoming a mortgage loan officer? 

The following are the steps to becoming an MLO: 

Comply with the minimum standards 

You must be at least 18 years old and have a high school diploma or GED to work as a mortgage loan officer. Try to take math and finance-related classes in school to begin developing the information and skills needed to become an MLO. 

 Take all required pre-licensure courses. 

Mortgage loan officers must complete certain pre-licensure courses, according to the National Mortgage Licensing Service (NMLS), to ensure that they have a solid understanding of the job. These courses last 20 hours and include topics such as federal law and regulations (three hours) 

Sections on fraud, fair lending, and consumer protection issues are included in the ethics section (three hours) 

In the non-traditional mortgage product industry, there is training on lending requirements (two hours) 

Additional information on the origination of mortgages (12 hours) 

Courses on your state’s mortgage lending rules and other state-specific issues are also required education. Visit the NMLS website to learn more about state-by-state education requirements. 

Find out what your state’s licensing requirements are. 

Obtaining a valid mortgage origination license is the next step in becoming an MLO once you complete your pre-licensure courses. These licenses are issued by state agencies, and each state has its own requirements for acquiring MLO certification. You’ll also have to pay an MLO license fee, which varies by state. 

Successfully complete the SAFE MLO test 

You must also pass the SAFE (Secure and Fair Enforcement Act) MLO test with a minimum score of 75 percent to get your mortgage loan officer license. This test assesses your understanding of federal and state mortgage lending legislation. The test can be retaken, however there is a 30-day waiting time for retakes. You must wait 180 days to retake the SAFE MLO test after taking it three times. 

Keep your license active. 

You must maintain your license current after receiving it by following certain conditions, such as keeping your information up to date. For example, if you start working for a new company, you must tell the NMLS so that your unique identifier can be updated. To learn more about deadlines, fees, checklists, license renewal, and changing your mortgage loan officer information, go to the NMLS website. 

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Keep your studies going. 

To be eligible for license renewal, mortgage loan officers must complete eight hours of NMLS-approved continuing education each year. This education must contain the following: 

Three hours of federal regulations and law 

Two hours of ethics training on topics like as fraud, fair lending, and consumer protection 

Two hours of lending standards training for non-traditional mortgage products 

One hour on mortgage origination services, which you can earn by completing a state-specific course. 

Acquire experience 

Work as a mortgage loan officer when you’ve completed all of your schooling and licensing requirements. You can work independently, but for your first MLO job, you should look for work at a reputable mortgage lending firm, bank, or credit union.

Mortgage loan officer abilities 

Consider learning the following abilities to be an effective MLO: 

MLOs use simple language to explain numerous loan options to borrowers, keep them up to date on their loan status, and link them to helpful resources. They can use interpersonal skills to engage with borrowers and make the loan process go more smoothly. 

MLOs frequently work on numerous loans at the same time, thus organization is a key skill to master. It also makes it easier for them to stay on top of their ongoing education and licensing obligations. 

Attention to precision is especially important for MLOs because they work with a lot of figures and individual loan criteria. They can use this competence to ensure that interest rates, loan amounts, and borrower information are accurate. 

MLOs should have in-depth financial expertise to assist borrowers in making educated selections. They spend the majority of their days examining customers’ finances, including credit scores and income, to see if they qualify for various loans.

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What is the average salary for a Mortgage Loan Officer? 

In the United States, the average annual salary for a Mortgage Loan Officer is $73,756. 

If you need a quick salary calculator, that works out to around $35.46 per hour. This is the equivalent of $1,418/week or $6,146/month. 

While yearly incomes as high as $181,000 and as low as $16,000 have been reported, the bulk of Mortgage Loan Officer salaries in the United States now vary from $35,000 (25th percentile) to $100,000 (75th percentile), with top earners (90th percentile) earning $120,000 annually. The average compensation for a Mortgage Loan Officer ranges widely (up to $65,000), implying that there may be several prospects for growth and higher income dependent on skill level, region, and years of experience.

Is Working as a Loan Officer a Good Job? 

Making a career move is sometimes easier said than done, but a new job could be just what you need to start achieving your life goals. Do you dread getting out of bed in the morning because you know you’ll be working at a job that doesn’t inspire or fulfill you? If you’re a self-motivated individual who enjoys educating and assisting people in a constantly changing workplace, becoming a loan officer could be the perfect fit for you. Is being a loan officer a wise career choice now? 

You’ve probably met and dealt with a loan officer in some way if you’ve ever bought a house, car, or other big purchase that required the use of a loan. Other names for loan officers include mortgage originators and mortgage bankers. While the title may vary depending on where you work, the job’s emphasis stays the same. 

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A loan officer in the mortgage sector is someone who works for a lender (which could be a bank or a private mortgage brokerage) who helps borrowers with their loan applications. There’s a lot more to the job than that sentence implies, but let’s start with the basics by delving into some frequently asked questions regarding loan officers and what you can expect from them.

I’d like to work as a loan officer, but I’m not sure where to start. Are there any prospects for advancement? 

Loan officers often work for a bank or credit union, although they can also work for private mortgage firms, real estate agencies, their homes, or other places. Depending on where you discover them, their workspace and schedule will differ. 

If you decide to pursue a career as a loan officer, where you begin your career will determine what your job will include and whether or not you will be able to advance. If you choose to work for a bank, you will have the opportunity to advance because mortgages are generally processed by branch managers or assistant branch managers. From loan officer to assistant branch manager to other higher roles, you might work your way up. These positions, on the other hand, do not provide as much scheduling and workspace freedom as other possibilities. 

Retail banks are another location where you could work. These are huge institutions that specialize entirely in mortgages, such as Rocket Mortgage. It may be feasible to work from home or set your own hours with this type of company. Models are layers of loan officers and managers within a retail bank, implying that advancement up the corporate ladder is feasible. 

You might also work for a mortgage brokerage firm if you don’t want to work for a bank. This type of work environment is ideal for loan officers that enjoy generating leads and working as much as they desire. It would also provide you with access to a broader range of loan options to offer to consumers, as most financial institutions only offer a limited number of loan products to borrowers.

Does a loan officer need to have a specific degree or license? 

Let’s take a look at the schooling requirements for loan officers. To begin, you must be at least 18 years old. To work as an officer, you don’t need a college diploma, however a bachelor’s degree is desirable. A background in finance, business, or other similar subjects, however, may be advantageous. You don’t need any experience to get started, but you should be aware that if you don’t have any, it will likely affect the type of job you obtain. 

The standards for loan officers differ from state to state. To work as a loan officer in most states, you’ll need to pass a license exam. Following at least 20 hours of training and background and credit checks, the exam is normally administered. The National Mortgage Licensing System and Registry must authorize the coursework (NMLS). This is the federal agency in charge of overseeing mortgage lenders in the United States. To legally work as a loan officer, you’ll need to obtain an NMLS number from the organization. 

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Once you’ve obtained a state license, you’ll need to pass a national exam administered by the National Mortgage Licensing System (NMLS). You can take the SAFE Mortgage Loan Originator Test in person or online. It will set you back $110, and you’ll have 190 minutes to do it. Exam and license fees vary by state. 

What steps do I need to take to become a mortgage loan officer? 

To become a licensed loan officer, you must first register with the National Mortgage Licensing System and Registry (NMLS), then complete 20 hours of pre-licensure education courses and pass the NMLS mortgage licensing exam, as well as meet any other state-specific criteria. 

Expertise is typically developed on the job after you’ve completed the criteria for licensure. Joining an independent mortgage broker business is a fantastic way to get started. If you’re new to the sector, you can consider working as a loan officer assistant, or LOA, to gain experience and learn about the origination process before completing your license requirements. 

Is it possible for me to work as a real estate agent and a mortgage loan officer at the same time? 

In the home-buying process, both real estate brokers and mortgage loan officers are crucial. Homebuyers should collaborate with both specialists to find and finance a property from start to finish. 

Because their services are complementary, it is frequently recommended that independent mortgage experts cultivate strong relationships with real estate agents in order to provide a quick and painless experience for their clients and to establish a referral network. As a result, it’s a frequent misunderstanding that operating as a real estate salesperson and a mortgage loan officer at the same time is a conflict of interest that must be avoided. If your state and lender programs allow it, you can certainly do both, as long as you provide the proper disclosures to guarantee you are in compliance with requirements. 

Many real estate agents are also licensed mortgage loan officers in jurisdictions like California and Florida. They frequently choose to extend their services and expertise to streamline the house purchasing and financing process, allowing them to become more competitive in their market and guarantee that their clients’ overall experiences are the best they can be. 

If you want to become a dual-licensed professional, you should first check with your state to learn more about their specific method and requirements. 

Is strong credit required to become a mortgage loan officer? 

Obtaining a license necessitates training, fulfillment of specified requirements, and adherence to specific standards. Because criteria vary, people may rule themselves out of a job based on requirements they believe are in place but aren’t. While there are national and state licensing standards for mortgage loan officers, there are no criteria for a minimum credit score in order to obtain a license. 

Your career future does not have to be defined by a poor credit score or other worries. Give your state’s licensing team a call if you’re concerned about how your past credit troubles may affect your ability to get licensed. It’s usually not the occurrence itself that has an impact on consumers, but whether or not it establishes a trend.

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