A mortgage loan officer plays a vital role in the home buying process. They help prospective buyers navigate the complex world of mortgage lending to secure financing for their dream home. It’s a rewarding career that allows you to guide clients through major financial decisions.
In addition to job satisfaction, mortgage loan officers earn a healthy salary. The average base pay is around $60,000, but commissions and bonuses can push total compensation well over $100,000. Top performers take home $200,000 or more per year.
If you’re interested in becoming a mortgage loan officer, this guide will walk you through the exact steps to get licensed and start earning a great living.
Mortgage Loan Officer Job Overview
A mortgage loan officer, also known as a mortgage originator, has two main responsibilities:
- Educating clients on loan options and the home buying process
- Assisting clients with applying for and securing mortgage financing
On a typical day, you’ll meet with prospective homebuyers to assess their financial situation. You’ll pull their credit report to determine affordability and discuss different loan programs available like FHA, VA, USDA, and conventional loans
Once a buyer is under contract on a home, you’ll gather documentation, submit the loan application and act as the main point of contact throughout underwriting and closing. This involves coordinating with real estate agents processors, underwriters, and the rest of the lending team.
Strong communication skills and customer service are essential for success as a loan officer. You need to explain complicated financial information in easy-to-understand language for borrowers.
Mortgage Loan Officer Salary and Compensation
According to the Bureau of Labor Statistics, the average annual salary for a mortgage loan officer is $63,970. However, this includes both commissioned and non-commissioned loan officers.
Most mortgage loan officers work on a commission basis. This means compensation is tied directly to your loan volume. The more loans you close, the more money you make.
On average, mortgage loan originators earn 1% of the total loan amount in commissions. So on a $300,000 mortgage, you’d earn around $3,000.
It’s common for high-performing mortgage loan officers to close $80-100+ million in volume per year. At that production level, you can easily make $200,000-300,000 or more annually.
Top mortgage brokers in high cost-of-living metro areas like San Francisco and New York often make $500,000-1,000,000+ in commissions.
Step 1: Meet the Basic Requirements
To become a mortgage loan officer, there are a few basic requirements:
- Be at least 18 years old
- Have a high school diploma or equivalent
- Pass a background check
- Hold a valid state license
Strong math and finance skills are essential in this role. Coursework or experience in banking, lending, sales, or real estate is also helpful.
Step 2: Complete Mortgage Loan Officer Education
All prospective mortgage loan officers must complete pre-licensing education, which covers topics like:
- Mortgage lending fundamentals
- Ethics and regulations
- Loan products and programs
- Credit evaluation
- Closing processes
You can complete the required 20 hours of courses online through an approved provider like Mortgage Educators or 360training. The cost ranges from $200 to $300.
Some states may require a few additional hours focused on state-specific laws.
Step 3: Pass the SAFE Mortgage Loan Originator Test
After completing education, you’ll need to pass the SAFE Mortgage Loan Originator exam administered by the Nationwide Multistate Licensing System (NMLS).
This test consists of 125 multiple choice questions. You must score at least 75% to pass. It costs $110 to take the exam.
The test covers topics like federal mortgage regulations, ethics, credit assessment, and state-specific lending laws. You can schedule it at a local testing center when you feel ready.
Step 4: Meet State Licensing Requirements
Each state has its own mortgage loan officer license requirements. This includes submitting a license application, passing a background check, and meeting any additional state prerequisites.
For example, some states require fingerprinting or a minimum number of experience hours.
You’ll submit the license application through the NMLS and pay applicable state fees, which range from $100 to $500. The process takes around 45 days.
Step 5: Get Sponsored by a Company
To act as a mortgage loan originator, you must be sponsored by a mortgage lender, bank, or broker. This sponsoring employer essentially endorses your license and oversees your lending activities.
It’s common to find a job with a sponsor company first. Then they’ll handle your licensing and sponsorship.
Popular mortgage companies like loanDepot, United Wholesale Mortgage, and Better.com actively hire new loan officers. You can also join a smaller independent mortgage brokerage.
Step 6: Grow Your Career
Once licensed, focus on building your loan officer business. Consider setting monthly and annual loan volume goals to keep yourself on track. Promoting your services directly to real estate agents and past clients is also key for growth.
Further down the road, you may want to pursue an advanced degree like an MBA to move into mortgage leadership roles. Getting your broker license to start your own mortgage company is another option. The possibilities are endless!
The average mortgage loan officer earns around $60,000 in base salary. But commissions and performance bonuses can quickly double or triple your income. Top originators make well over $200,000 per year.
If you love working with clients and have strong sales skills, it’s a lucrative career path worth considering. This step-by-step guide outlines everything you need to know to become a successful mortgage loan officer.
How to Become a Mortgage Loan Officer
Becoming a mortgage loan officer has its perks, but getting there takes some time and dedication. Having an undergraduate degree can make you more appealing to potential employers. Most importantly, you must be licensed to become fully qualified.
What Does a Mortgage Loan Officer Do?
Mortgage loan officers focus exclusively on real estate loans for individuals and businesses. They usually work for mortgage brokers, commercial banks, credit unions, or mortgage companies. They often work in an office and travel to meet potential borrowers.
The day-to-day duties of a mortgage loan officer include:
- Developing relationships with real estate companies
- Assessing potential borrowers’ credit
- Discussing loan options with potential borrowers
- Ensuring that loan agreements adhere to state and federal regulations
- Keeping records of loan applications and mortgage transactions
- Coordinating with underwriters to determine potential borrower risks
- Working with appraisers to obtain an accurate market value for a property
Check out Monster’s sample mortgage loan officer job ad to learn more about what employers look for when hiring for this role.
How to Become a Mortgage Loan Officer in 2024! (Step by Step)
FAQ
Is it hard to make money as a mortgage loan officer?
How much does a mortgage loan officer make in Texas?
What is the demand for mortgage loan officers?
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.
How much do mortgage loan officers make?
The median mortgage loan officer salary is just over $66,000 per year, according to data compiled from Monster.com. The lowest-earning mortgage loan officers, meanwhile, average roughly $42,500 per year and the highest-earning officers make upwards of $89,000 per year.
Is a mortgage loan officer a good career?
Mortgage loan officers help prospective homeowners choose the best mortgage option for their financial situation. This can be a rewarding career if you like helping people—and it can be potentially lucrative. But before you take that next step in your career, it is important to know what you’re getting yourself into.
How much does a loan officer make in 2022?
Loan Officers made a median salary of $65,740 in 2022. The best-paid 25% made $99,200 that year, while the lowest-paid 25% made $47,890. Average Americans work well into their 60s, so workers might as well have a job that’s enjoyable and a career that’s fulfilling.
How do I become a mortgage loan officer without a degree?
However, some candidates who don’t have a bachelor’s degree might be able to get a job with relevant experience, such as a history of working at a bank. Mortgage loan officers must also earn a mortgage loan originator license, which involves taking required courses and passing a background check and credit check.
Do mortgage loan officers need a license?
Mortgage loan officers must also earn a mortgage loan originator license, which involves taking required courses and passing a background check and credit check. Each U.S. state and territory has specific licensing requirements, so make sure you understand what’s required in the state where you’re applying to work.