As a mortgage loan originator (MLO), your job is to educate and guide borrowers through the loan process from application to closing. A loan officer career is a fulfilling way to earn a living and help others at the same time.
An MLO spends much of his/her time in the field, communicating by email and phone with the office and clients. A typical workweek may be more than 40 hours and include evenings and/or weekends, especially when interest rates are low and the housing market is brisk.
As you get started in your mortgage broker career, your day-to-day responsibilities might include the following:
A loan originator, also known as a mortgage loan originator plays a critical role in the mortgage lending process. They are the main point of contact for borrowers seeking a home loan. The loan originator guides applicants through the entire process, from application to closing.
In this article, we’ll take an in-depth look at the typical duties and responsibilities of a loan originator job.
Main Functions of a Loan Originator
The core functions of a loan originator include:
- Meeting with prospective borrowers to explain loan options
- Collecting documentation and information needed for loan applications
- Assessing borrowers’ financial situations to determine loan eligibility and affordability
- Pre-qualifying borrowers and providing estimates for loan amounts/rates
- Submitting completed applications and supporting documents to underwriters
- Acting as the main contact for borrowers throughout the lending process
- Ensuring all conditions are met prior to loan closing
- Coordinating with real estate agents, lenders, and other professionals throughout the transaction
Essentially, the loan originator takes on a consultative role to guide borrowers through all the complex steps of getting a mortgage loan approved and closed.
Typical Daily Duties and Tasks
On a day-to-day basis, a loan originator may handle duties like:
- Responding to inquiries from potential borrowers via phone, email or in-person meetings
- Interviewing applicants about their financial situation, income, debts, assets, credit history and property goals
- Explaining different loan programs and products to applicants based on their needs
- Collecting documentation from borrowers such as tax returns, bank statements, pay stubs, and real estate purchase agreements
- Inputting applicant data into loan origination software programs
- Running initial calculations on maximum loan amounts, rates, and monthly payments
- Requesting formal credit reports and other third party verifications needed for loan approval
- Identifying any potential issues or red flags in a borrower’s application upfront
- Submitting completed loan application packages to underwriters for approval
- Serving as the ongoing contact for borrowers to provide status updates and coordinate next steps
- Ordering appraisals, inspections, surveys or other requirements once underwriting is cleared
- Reviewing final loan documents, disclosures, and closing instructions with borrowers
- Attending closings and ensuring customers understand terms and conditions
Additionally, loan originators spend time each week on marketing and outreach to generate new business, such as:
- Building referral networks with real estate agents, attorneys, insurance agents, and other professionals
- Contacting past customers/clients to inform them of new loan programs or rate changes
- Promoting their services through websites, social media, advertisements and community events
- Developing and distributing marketing literature and informational resources
They also stay up to date on the latest compliance regulations in the mortgage industry.
Key Skills and Qualifications for Loan Originators
To succeed as a loan originator, certain skills and experience are beneficial, including:
- Sales, customer service and communication abilities – explaining complex financial information requires strong interpersonal skills
- Organization and multi-tasking to handle high volumes of applications
- Attention to detail when compiling documentation and paperwork
- Math, analytical and critical thinking skills for underwriting analysis
- Mortgage and lending knowledge – familiarity with loan programs, underwriting guidelines, and regulations
- Proficiency with computers and loan origination software programs
- Decision making and problem solving skills to evaluate applicant eligibility
- Time management and ability to work independently as well as on a team
In terms of formal education, many loan originators have college degrees in business, finance, marketing, or related fields. Specific mortgage industry training and/or certification is usually required as well.
Loan Originator Requirements and Licenses
Depending on the state, loan originators may need to meet certain licensing requirements to conduct mortgage lending activities. These commonly include:
- Completing 20+ hours of pre-licensing education courses
- Passing both a national and state licensing exam
- Undergoing background checks for any criminal history
- Maintaining a surety bond
- Carrying E&O insurance (errors and omissions)
- Meeting continuing education requirements annually
Some states require loan originators to be licensed as both a loan officer and a real estate broker if they are involved in certain referral activities with realtors.
Additionally, most employers will conduct credit and reference checks on candidates before hiring them into an originator role.
How Loan Origination Works in the Lending Process
Understanding where loan origination fits into the bigger picture of mortgage lending is helpful for anyone looking to become a loan originator.
Here is a general overview of how it works:
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Borrower Outreach: The loan originator markets services and fields inquiries from potential borrowers. This generates leads.
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Initial Interview: The loan originator meets with prospects to discuss their goals, educate them on loans, and gather information to determine possible options.
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Pre-qualification: Using gathered details, the originator makes preliminary calculations on affordability to pre-approve a maximum loan amount. This helps prospects get an idea of price range when house hunting.
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Application: Once a property is selected, the borrower completes a full loan application and submits documentation for formal underwriting approval. The originator assists in collecting all required paperwork.
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Processing & Underwriting: The originator reviews the full package then submits it to the lender’s processor. They validate all documents meet guidelines before passing to underwriters who ultimately approve or deny the loan.
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Closing: After all underwriting conditions are cleared, the originator coordinates the closing meeting where borrowers sign final loan documents.
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Funding: Finally the originator ensures the executed loan documents get delivered to the lender to allow loan funding or wire transfers to escrow.
So the loan originator is the guide throughout the entire journey, from origination to closing. They make the process smooth for borrowers.
Loan Originator Compensation and Commissions
Many loan originators work on a commission-based structure, earning money based on the loans they generate and close each month.
Commission rates often follow tiered levels based on monthly loan volume or dollar amounts. For example:
- 0.5% commission on the first $1 million in monthly volume
- 0.75% commission on volume between $1M – $3M
- 1.0% commission over $3M+ in volume
It’s also common to see bonuses for referrals that turn into closed loans. Some companies pay a small base salary plus commissions.
Commission payouts happen after the loan funds, so income fluctuates month-to-month. Top producers can earn over $100,000 annually.
How to Become a Successful Loan Originator
If the loan originator profession appeals to you, here are some tips for getting started and building a successful career:
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Obtain the required licensing and education for your state. Having a formal mortgage license signals professionalism to borrowers.
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Look for entry-level positions at banks, credit unions, or mortgage companies to gain hands-on experience. Many provide extensive on-the-job training programs.
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Build a network of referral partners such as real estate agents, attorneys, and insurance representatives who can send business your way. Offer to pay referral fees.
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Get to know your loan products inside and out so you can quickly match borrowers with their best options. Keep up with new programs.
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Focus on customer satisfaction by being informative, responsive, and available throughout the lending process. Follow up post-closing.
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Ask clients for online reviews and testimonials that you can use in your marketing materials.
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Stay organized with your pipeline of leads and applications so you can provide prompt status updates. Use CRM software if needed.
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Meet monthly loan closing goals consistently to maximize your commissions earnings. Track your metrics.
Putting these tips into practice takes discipline and time. But the result is a rewarding long-term career helping home buyers and refinancers get the financing they need.
Benefits of Being a Loan Originator
There are many advantages to the loan originator role beyond the commissions potential, including:
- Opportunity to make a big impact in people’s lives through home ownership
- Satisfaction of guiding borrowers through a complex process from start to finish
- Variety of different tasks each day to keep the job interesting
- Flexible work hours and ability to manage your own book of business
- Continuous learning about new mortgage loan guidelines, regulations, and products
- Low costs to get started – primarily just licensing, education and a computer
- Ability to switch companies without losing your client base since originators own their relationships
For the right person, being a mortgage loan originator can be an engaging career with upside earnings potential as you expand your skills and portfolio of clients over time.
The Bottom Line
A loan originator typically serves as the main representative for borrowers throughout the home buying financing experience. Their core duties include collecting documentation, submitting completed applications, navigating the underwriting process, and supporting borrowers up to loan closing.
To succeed as a loan originator, strong communication abilities, financial analysis
Is an mlo career right for you?
As a mortgage loan originator (MLO), your job is to educate and guide borrowers through the loan process from application to closing. A loan officer career is a fulfilling way to earn a living and help others at the same time.
An MLO spends much of his/her time in the field, communicating by email and phone with the office and clients. A typical workweek may be more than 40 hours and include evenings and/or weekends, especially when interest rates are low and the housing market is brisk.
As you get started in your mortgage broker career, your day-to-day responsibilities might include the following:
- Interview loan applicants and explain loan terms and conditions
- Analyze the applicant’s financial status, including verifying credit history, income, and the property to determine whether the applicant has the ability to repay the loan
- Order appraisals, credit reports, and reference checks
- Prepare loan documentation in accordance with financial institution standards
- Provide status reports to bank management on residential loan production
- Coordinate loan closings with buyers, sellers, real estate agents, and escrow officers
- Resolve customer complaints
In addition to your desire to become an MLO, there are certain characteristics and skills you’ll want to be sure you have in your toolbox to help you be as successful as you can be.
- A love of working with people
- Sales ability
- Excellent communication skills
- Strong analytical skills
- Ability to problem solve
- Excellent attention to detail
- Highly motivated and self-driven
Once you have obtained your MLO license, there are various avenues you can pursue in an effort to get started in your new career.
- Check for job opportunities at one of the many bank industry websites for available positions
- Attend job fairs sponsored by state mortgage bankers’ associations to get to know potential employers
- Contact employers in your area directly for informational interviews
- Ask for referrals from friends or associates
Demand for commissioned mortgage loan officers will grow about as fast as employment opportunities in general, according to the Bureau of Labor Statistics. The mortgage market is very sensitive to interest rates, which means job opportunities may decline during periods when mortgage interest rates are rising.
As you get started in your mortgage broker career, your day-to-day responsibilities might include the following:
- Must be 18 years or older and demonstrate financial responsibility
- Have a bachelor’s degree. Some experience in finance and sales is helpful to getting hired, but is not required
- Take 20 hours of prelicensure education courses approved by the Nationwide Mortgage Licensing System (NMLS). Certain states also require that MLOs complete state-specific education
- Pass a written exam developed and administered by the NMLS
- Not have been convicted of, or pled guilty or no contest to, a felony within the seven years preceding the date of the license application
- Not have been convicted of, or pled guilty or no contest to, a felony involving fraud, dishonesty, breach of trust, or money laundering, at any time preceding license application
- Not have a record of loan originator license revocation in another state
- Provide fingerprints to the NMLS for an FBI criminal background check and authorize the NMLS to obtain a copy of their credit report
- A MLO working for a federally insured depository (such as a bank or credit union) must be registered with NMLS. All other mortgage loan officers must be state licensed.
Financial institutions normally provide extensive on-the-job training to loan originator employees.
Federal law requires new mortgage loan officers to complete at least 20 hours of education approved by the NMLS, including instruction on federal mortgage-related laws, ethics (including fraud, consumer protection, and fair lending), and lending standards for nontraditional mortgage products.
Interactive • Engaging • Flexible
OnCourse Learning provides NMLS-approved courses in a variety of formats – recorded and live webinars, online and video CE.
These courses are for individuals who are looking to become licensed as a mortgage broker, preparing to take the national exam, need to satisfy annual continuing education requirements or looking to enhance their skills through professional development.
Courses for continuing education fulfills the national education requirements and all state-specific requirements.
What does a Loan Officer Loan Originator Do? (Loan Officer Day In The Life)
FAQ
What is a loan originator job description?
What is one function of the loan originator?
What does a mortgage loan originator do?
A mortgage loan originator, or mortgage loan officer, helps a potential borrower choose the right mortgage product and successfully complete the mortgage application process. Mortgage loan officers usually work for a bank or mortgage company. They work in an office where they meet potential clients and conduct business.
How do I write a mortgage loan originator job description?
To write an effective mortgage loan originator job description, begin by listing detailed duties, responsibilities and expectations. We have included mortgage loan originator job description templates that you can modify and use.
How do I write a mortgage loan officer job description?
Think about your typical mortgage loan officer: busy, driven to meet objectives, and practical. As such, your mortgage loan officer job description should be brief, specific, and realistic. Introduce your company, then outline your expectations.
What does a mortgage loan officer do?
Mortgage loan officers usually work for a bank or mortgage company. They work in an office where they meet potential clients and conduct business. If you are a quality, experienced mortgage loan officer, you can normally expect to receive promotions and regular pay increases. Is this useful? Our career coaches can help you make a plan.