Are you interested in learning about how to become a mortgage officer? Known in the industry as a mortgage loan originator, or MLO, these professionals play a key part in the process of helping buyers find homes that are right for them — typically, they are the primary contact person when a borrower completes a mortgage transaction.
More specifically, they help buyers find home loans that are right for them — mortgages that fit their budget and will allow them to stay in the homes they purchase for the long term.
Not only do MLOs support homebuyers, they serve a vital function in the real estate industry. With responsible MLOs, mortgage fraud and foreclosures drop significantly. Great MLOs are on the front lines in maintaining a stable home-buying market.
Many people find this to be an attractive career path. Mortgage loan officer is listed #14 in U.S. News & World Reports rankings for business jobs. The median salary for the position is $64,660 and it doesnt require any graduate-level education.
Becoming a loan officer can be a rewarding career path that allows you to help people realize their dreams of homeownership. As a loan officer, you get to work with clients to find the best mortgage options for their needs and guide them through the home buying process. If you’re interested in finance sales, real estate, or helping others, being a loan officer may be the perfect role for you.
But how exactly do you start on this career path and become a licensed loan officer? Here is a comprehensive step-by-step guide on how to become a loan officer.
Step 1: Make Sure You Meet the Basic Requirements
To qualify for a loan officer role. there are some basic standards you need to meet
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Education: Most mortgage companies require loan officers to have a bachelor’s degree. Common majors include finance, business, economics, or marketing. Coursework in real estate is also helpful.
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Sales experience: Prior experience in sales, especially financial services sales, is highly valued. This proves you have the skills to originate and close loans.
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Industry knowledge: Before becoming a loan officer, you should have a solid understanding of the mortgage industry and common loan types, terminology, qualification criteria, and regulations.
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Interpersonal skills: As a loan officer, you’ll work closely with borrowers to understand their needs and guide them through the mortgage process. Strong communication and customer service skills are essential.
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Compensation model: Most loan officers earn commission based on the dollar amount of loans closed. You need to be comfortable with a performance-based pay structure.
Step 2: Obtain Your Mortgage License
To originate mortgages, loan officers must become licensed by their state. Here are the main steps:
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Complete 20 hours of NMLS-approved pre-licensing education courses covering topics like ethics, lending laws, loan products, and more.
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Pass the SAFE Mortgage Loan Originator national exam with a score of at least 75%.
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Submit fingerprints and authorization for a criminal background check.
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Complete any supplementary state-specific education requirements.
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Submit license application form and pay licensing fees to your state regulator.
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Get sponsored by a mortgage company who will submit your credentials to the NMLS for final approval.
Once approved, you will receive your unique mortgage loan originator (MLO) license number. The process takes 1-2 months and costs $300-$500 including exam fees, background checks, and licensing charges.
Step 3: Find a Mortgage Company to Work For
As a loan officer, you’ll need to hang your license with a mortgage lender, bank, or mortgage brokerage. Consider factors like:
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Reputation – Work for a trusted, ethical company. Check online reviews.
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Leadership & training – Look for strong coaching and development programs.
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Technology resources – Utilize platforms that streamline origination and improve efficiency.
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Products & rates – Offer diverse loan programs and competitive pricing.
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Commission structure – Understand the pay model and earning potential.
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Office culture – Find an environment that aligns with your work style.
Search job listings on sites like Indeed, ZipRecruiter, LendingTree, and Morty. Reach out to companies that interest you. Highlight your skills and discuss sponsorship.
Step 4: Build Your Knowledge
Dive deeper into mortgage industry training:
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Shadow experienced loan officers: Learn best practices for prospecting, sales, underwriting, and closing loans. Gain insights from their successes and challenges.
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Study loan guidelines: Review product matrices and eligibility criteria for different loan types like conventional, FHA, VA, jumbo, etc. Know how they differ.
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Learn affordability calculators: Become skilled in using tools to assess borrower eligibility and find optimal loan options based on income, debts, and financial goals.
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Master CRM systems: Get trained on your company’s customer relationship management platform for managing contacts, tracking leads, and monitoring pipelines.
Step 5: Start Prospecting and Building a Network
A loan officer’s main role is generating new mortgage business. That requires diligent prospecting:
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Referral partnerships: Collaborate with real estate agents, attorneys, CPAs, home builders, and other professionals who can refer clients. Offer co-branded open houses or seminars.
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Database marketing: Purchase targeted lead lists. Send direct mail campaigns. Make outbound calls and emails to potential borrowers.
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Social media: Share mortgage and real estate content to establish yourself as an expert. Participate in local Facebook groups and LinkedIn communities.
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Community involvement: Join the chamber of commerce, volunteer, coach youth sports, etc. Meet people and build relationships.
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Events: Host educational workshops. Table at home shows. Network at local association meetings.
Step 6: Master Consultative Sales
As a loan officer, you’re not just a salesperson – you’re a trusted advisor. Here are tips for consultative mortgage sales:
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Ask probing questions to understand the client’s unique situation, goals, budget, home preferences, etc. Actively listen more than pitch.
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Educate clients by clearly explaining loan options, terminology, rates, fees, costs, and the home buying/refinancing process.
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Use affordability tools to perform calculations together and show optimal solutions. Provide loan comparisons.
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Address concerns transparently. Explain tradeoffs, risks, and things to watch out for. Provide peace of mind.
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Guide clients through the application process. Follow up proactively. Celebrate milestones.
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Build genuine rapport and trust. Don’t be pushy. Offer advice based on their best interest.
Step 7: Continue Growing Your Skills
Look for ongoing ways to boost your expertise:
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Read mortgage industry publications and news sites daily. Stay updated on rates, regulations, and trends.
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Attend lender conferences and training events. Immerse yourself in the community.
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Study earnings reports and benchmarking data so you deeply understand loan officer compensation models.
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Seek mentorship from top producers. Ask how they structure their day, overcome obstacles, and achieve their goals.
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Consider getting additional professional designations like Certified Mortgage Planner (CMP) which further validates your knowledge.
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Set learning goals each year. Determine new areas of expertise you want to develop through self-study, coaching, courses, or conferences.
Becoming a successful loan officer requires dedication but can be very rewarding. Follow this guide to gain the skills, knowledge, license, resources, and network to originate mortgages at a high level. Seek out a supportive company and be a sponge early in your career. If you commit to continuous learning and providing excellent service to borrowers, you can build a standout career in this field.
Before You Get Licensure
If you want to become a mortgage loan officer, you probably have a number of questions about what the position entails.
Lets go over everything you need to think about before you close your first loan.
In terms of personal qualities, MLOs need to be detail-oriented people.
As an MLO, you will be collecting a range of information from potential borrowers and submitting this information to lenders. This information needs to be handled carefully and presented accurately. Staying organized is critical because the clients you work with will often be making the most important buying decision of their lives.
It is also beneficial if you are an outgoing person. You will be working with a wide range of people, and referrals tend to make up a large portion of your business. Making a good impression is key.
Knowledge of the real estate industry — or at least willingness to learn — is another important quality. MLOs need to stay up to date on how mortgage lending is evolving. New products, innovations, and regulations are always part of the mix.
If you are the kind of person who is always learning something new, you may want to become a mortgage loan originator.
MLOs deal with potential homebuyers sensitive financial information every day. They also act as a liaison between lending institutions and potential borrowers. Lenders need to have loans repaid; borrowers need to stay in their homes — and the MLO is a cornerstone to ensuring that both are in the best situation possible.
For anyone who wants to become a loan originator, it is a career that requires you to have financial character and stability. This is to prevent bad actors from becoming involved in the industry, which was one of the main problems that led to the 2008 financial collapse.
This means you need to meet certain financial requirements and have a clean criminal history. Any of the following scenarios are likely to result in licensure rejection:
- Criminal conviction related to fraud
- Poor credit history
- History of foreclosure or other significant unpaid debts
- Previously revoked licensure in other states
It is always best to disclose as much as possible on your application. There are instances where regulators will accept an applicant even though they have potential red flags. For example, many states have legal exceptions for applicants with unpaid medical debt. A criminal conviction unrelated to fraud, such as a DUI, also might not result in licensure rejection.
At this point, you might be asking the question: how long does it take to become a loan officer? The answer is that it all depends on how you approach it, but rest assured if you begin investing time and money in the process, you will want to complete it.
Doing your research before diving into pre-licensure courses is important.
The National Mortgage Licensing Service (NMLS) is the main regulatory body for MLOs and has a wealth of useful information, including state-specific requirements for licensure. Here at The Coop, we have information on everything from Online CE and Live CE to a community of professionals tackling a range of questions and a list of resources for MLOs. Taking the time to understand exactly how to become a mortgage loan originator in the first place will mean you are confident going into training.
One piece of good news is that you dont need a specific degree to become involved in this field. MLOs typically come from a background in business, banking, economics, or finance, but it isnt required. Instead, MLOs must obtain licensure through passing a test, taking pre-licensure education courses, and submitting information for approval by the NMLS.
Lets say you have decided mortgage loan origination is the career path for you. What are your next steps?
The first and most important step is obtaining a valid mortgage origination license. It is illegal to practice mortgage loan origination without a state-issued license. The following will detail the steps you need to take for licensure.
One thing to remember is that each state has specific guidelines that apply to MLO licensure, and state agencies are the ones to actually issue licenses.
But there are a number of requirements listed in federal legislation that are applicable across the board. It is worthwhile to become familiar with the federal Secure and Fair Enforcement Act for Mortgage Licensing of 2008 (i.e. SAFE Act), a major bill passed by Congress in the wake of the mortgage lending crisis.
Per the SAFE ACT and the NMLS, MLOs are required to:
- Obtain licensing from their respective states
- Register with the NMLS
- Provide authorization to obtain a credit report
- Provide a variety of identifying information
- Provide fingerprints for a criminal background check
- Provide a financial services employment history for the past 10 years
- Disclose any financial regulatory body charges against them
- Attest to the completeness and accuracy of the information provided
One key step in how to become a mortgage originator is to complete courses as required by the NMLS. Applicants are required to take 20 hours of pre-licensure education courses, including the following:
- Three hours of Federal law and regulations
- Three hours of ethics that shall include instruction on fraud, consumer protection, and fair lending issues
- Two hours of training related to lending standards for the nontraditional mortgage product market
- Twelve hours of undefined instruction on mortgage origination
In addition to this, each state has specific requirements for education, typically on state-specific topics. This can range from education on alternative lending products like reverse mortgages, to how to spot red flags on a mortgage application.
Applicants should refer to their respective states guidelines on how to become a licensed loan officer.
Applicants for MLO licensure are required to pass the SAFE MLO test with a score of at least 75%. The test evaluates candidates on their knowledge of state and federal mortgage lending law. Many states have adopted the Uniform State Test, which applicants only need to take once. This makes it easier for licensees to apply for licensure in other states.
Per SAFE Act requirements, there is a waiting period between retaking the SAFE MLO test. On the first and second failures, applicants must wait 30 days each between test retakes. If an individual fails the test three times, they must wait 180 days before taking the test again.
Some other NMLS requirements include:
- Sponsorship: An individuals MLO activities must be sponsored and supervised by their employer. State regulators must approve sponsorships.
- NMLS Unique Identifier: An NMLS Unique Identifier is a number permanently assigned to each company, branch, and individual with an NMLS account. This system was designed for the purpose of better tracking each company and licensee, and is required to appear in all advertisements for mortgage origination services.
- Payment of fees: Applicants are required to pay fees in order to obtain licensure. The amount of these fees varies by state.
After You Get Licensure
Once you receive your license, you can begin work as a home loan originator. Some MLOs work independently, but newbies often prefer to begin with an established business that has an existing client base, such as a bank, mortgage lending institution, or credit union.
With all the bureaucracy involved in the licensure process, it is important to keep your focus on the goal you had in mind when you first started looking into how to become a loan officer — helping people move into their dream homes.
Buying property can be a complicated and stressful process for your average person, but a qualified and supportive MLO can make the experience easier, allowing homebuyers to enjoy their investment with the knowledge they have secured the best home loan possible.
The work doesnt end here, though. It is important that MLOs keep up with professional development to keep their license and stay current with mortgage lending practices.
Once you have a license, you must meet requirements to maintain active licensure status. An active status shows you meet all requirements of the federal registration process. You will need to renew your license annually, take continuing education courses, and keep all information filed with the NMLS up to date.
For example, if you plan to switch and work for a new company, you have to inform the NMLS of this move. The NMLS website includes helpful resources for licensure renewal, including handbooks, checklists, and information on fees, deadlines, and other requirements.
MLOs are required to complete eight hours of NMLS-approved continuing education annually to qualify for license renewal. It is the MLOs responsibility to complete this education and the renewal process. If you fail to do so, you could end up losing your license.
Continuing education is required to include:
- Three hours of federal law and regulations
- Two hours of ethics instruction on fraud, consumer protection, and fair lending issues
- Two hours of training related to lending standards for the nontraditional mortgage product market
- One hour of undefined instruction on mortgage origination, which may be fulfilled by completing a state-specific course depending on the states requirements
How to Become a Mortgage Loan Officer in 2024! (Step by Step)
FAQ
Is it hard to make it as a loan officer?
What is the highest salary for loan officer?
How long does it take to become a loan officer in California?
How do I become a mortgage loan officer?
Here are the steps you can follow to be an MLO: 1. Meet the basic requirements To become a mortgage loan officer, you need to be at least 18 years old and have a high school diploma or GED. While in school, try to take math- and finance-based classes to start gaining some knowledge and skills needed to be an MLO.
Do you need a degree to become a loan officer?
A degree is not required to become a loan officer but is helpful. If you are looking into working for a smaller financial institution or mortgage lender, you often need to be at least 18 years old and have a high school diploma. You should check the educational requirements of the job posting prior to applying to see if you qualify.
Do Loan officers need a license?
The licensure and certification requirements for loan officers can vary by state. Typically a Mortgage Loan Originator (MLO) license is required for processing mortgage loans. The American Bankers Association (ABA) offers certifications that will need to be renewed every three years. Common loan certifications to obtain are as follows.
What online courses can I take to become a loan officer?
Learn about joining the Morty platform. What online courses can I take to help prepare to become a loan officer? Oncourse: Provides coursework needed to get licensed in each state. Coursera: Features finance and mortgage lending courses from accredited institutions.