So you want to become a licensed Mortgage Loan Originator (MLO)? We are here to help navigate you through your mortgage licensing journey.
Whether you’re looking for a new career opportunity, in-between jobs, or seeking a side income opportunity – residential mortgage loan origination can be a rewarding and lucrative profession.
According to Mike Fratantoni, Mortgage Bankers Association chief economist, “The housing market has seen a meaningful rebound since the onset of the pandemic [in 2020]. Record-low mortgage rates have led to a surge in borrower demand for refinances and home purchases.”1
This resource serves as an introductory guide for the steps, entities and time required for a new candidate to become a licensed Mortgage Loan Originator.
Becoming a licensed mortgage loan originator involves meeting educational, testing and background check requirements. However, navigating licensing across all 50 states can be complex given states have their own specific rules. This article provides an overview of key steps to obtain your loan originator license in any state and maintain it in good standing.
What is a Mortgage Loan Originator?
A loan originator is an individual who works for a company that provides mortgage loans such as a bank credit union or online lender. The loan originator’s role includes
- Meeting with applicants to explain loan options
- Collecting documentation and information for loan applications
- Assisting with the application and approval process
- Maintaining contact through loan closing
Loan originators must be licensed in the states where they conduct mortgage business Licenses demonstrate meeting competency standards for ethics, lending laws, loan products and consumer protection
Why Become a Licensed Loan Originator?
Getting your loan originator license has multiple benefits
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Earn Higher Income – Loan originators are often paid through commissions. Higher loan volume allows greater earnings potential.
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Gain Credibility – A license proves you are qualified and adhere to lending regulations. This builds trust with consumers.
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Open Job Opportunities – A license allows more options for your mortgage career. Many lenders now require licensing.
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Build Expertise – Gaining knowledge to pass the exams gives you valuable expertise in lending.
Loan Originator Licensing Requirements
While state requirements vary, most share core licensing steps:
Prerequisite Education
You must complete 20 hours of NMLS-approved courses on topics like ethics, federal law, lending standards and loan products. Some states require additional state-specific education.
Background Checks
States order credit and criminal background checks through fingerprinting as part of approving licenses. Any prior bankruptcies or felonies may impact licensing.
Passing Exam Scores
The NMLS national test and any applicable state tests must be passed with scores of at least 75% in each area. Exams cover federal, state, and general mortgage lending laws and regulations.
License Application
All states use the NMLS online system to apply for licenses. You’ll submit personal and employment information, license history, background check consent and attest to meeting requirements.
Payment of Fees
A variety of state fees must be paid, such as application, license, testing and background check fees. Total costs range from $300 to $2400, depending on the state.
Timeline for Getting Licensed
The timeline for completing requirements and getting your approved loan originator license can be 3 to 12 weeks, depending on:
- Your state’s processing time for applications and background checks
- Course and exam scheduling availability
- Your study timeline to be prepared for passing the exams
- Employer processing of registrations and authorizations
It’s important to plan out the steps in advance and be aware of your state’s specific documentation rules to minimize delays.
Maintaining Your Loan Originator License
Once approved, active steps are required to keep your state licenses in good standing:
Continuing Education
You must complete at least 8 hours of continuing education each year on topics like new regulations, ethics and lending standards. Some states require more hours.
License Renewals
Licenses must be renewed annually in most states. Renewal periods and fees vary. Missing renewals can lead to license expiration.
Job Change Notifications
Changing mortgage employers requires an update of your license records within 30 days in most states. Employer authorizations must be kept current.
Ongoing Background Checks
Updated background checks occur periodically in some states. Any new criminal offenses require notifications to state regulators under most laws.
Key Steps for Getting Licensed in Each State
While state loan originator license requirements align on some aspects, many details on fees, forms, testing and specific rules differ in each state. Below are some top items to be aware of in a few example states:
California
- 20 hours of CA-specific education required
- Passing state exam score is 75%
- License fees total $300
- No continuing education requirements
Florida
- No additional state education or exams
- $490 in total license fees
- 14 hours of continuing education annually
New York
- License application can take 60+ days
- Must submit fingerprints for background check
- $405 total for license fees
- Continuing education is 11 hours per year
Texas
- Must complete 20 hours of TX-specific education
- Two state exams are required
- $374 in total license fees
- 8 hours of annual continuing education
No matter your state, closely reviewing their particular required steps, forms, deadlines and fees is crucial to smoothly obtaining and maintaining your loan originator license.
Resources for Loan Originator Licensing Help
Navigating all the state-by-state requirements for a mortgage loan originator license can feel complicated. If you need guidance, here are useful resources:
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NMLS Information – The NMLS website provides licensing checklists, requirements and education details for each participating state.
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State Regulators – Reach out to your state’s mortgage licensing authority for assistance with applications or clarification on unique rules.
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Mortgage Employers – Many lenders have dedicated compliance teams supporting their loan originators through the licensing process.
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Mentors – Network with experienced mortgage professionals who can share the specifics of how they handled becoming licensed.
While the road to getting your loan originator license has many steps, the investment will open doors in your mortgage career. By proactively educating yourself on state requirements and seeking help when needed, you can successfully join the industry as a licensed mortgage professional.
Get Started with OnCourse Learning
We empower aspiring mortgage loan originators and seasoned mortgage loan officers to take their learning experience to the next level.
With 10,000 clients and partners and over 40+ years of experience, we may know a thing or two when it comes to effective and engaging online education. Just ask the 200,000 individuals we’ve trained with our NMLS-approved licensure and continuing education courses.
- NMLS-approved mortgage pre-licensing courses
- Exam prep tools designed to help you pass your NMLS license exam
- Continuing education and late CE courses
- Professional development courses to help shape and advance your career
2Additional Requirements:
In addition to registering with NMLS and becoming state licensed, MLOs are required to:
- Provide fingerprints to the NMLS for an FBI criminal background check and authorize the NMLS to obtain a copy of your credit report.
- State-licensed, non-depository mortgage loan originators are subject to additional requirements under the Secure & Fair Enforcement for Mortgage Licensing Act of 2008 and at a minimum register with the Nationwide Multistate Licensing (NMLS).
- In some states, MLOs also must satisfy state-specific testing requirements to obtain a license. In April 2013, the NMLS launched the Uniform State Test, a section of the national exam, which replaces the state-specific test content for those states that have adopted it.
Additional Reading:
Become a virtual mortgage loan originator in 50 states.
FAQ
Is an NMLS license good for all states?
How a loan originator is compensated?
How to make money as a mortgage loan originator?
What is the difference between loan processor and originator?
How do I get a mortgage loan originator license in multiple states?
If one state’s housing market is sluggish, you can focus your efforts on providing loan options in a more robust market in a different state. The process to getting licensed in multiple states is very straightforward after you’ve passed the national SAFE exam and have your initial mortgage loan originator license.
How do I become a loan officer in a new state?
Find a sponsor in the new state you wish to be licensed in. Sponsors like Morty can help support you in expanding your licensing to a new state or getting licensed in multiple states as a new loan officer. Morty is licensed in 45 states and can help you quickly get sponsored in multiple states.
How do I become a mortgage originator?
Register with the Nationwide Mortgage Licensing System and Registry (NMLS). Take 20 hours of prelicensure education courses approved by NMLS. Certain states also require that mortgage loan officers complete state-specific education. Under the SAFE Act, all state-licensed loan originators are required to pass a national exam.
Can I get a loan in all 50 states?
So, if you wanted to originate loans in all 50 states, plus U.S. territories, you could. The only catch is that you would have to hold a valid license in all of these locations and make sure to complete the annual NMLS Continuing Education (CE) requirements.