How To Become A Mortgage Loan Officer Definitive Guide For 2021

A mortgage loan officer is one of the first points of contact for someone looking to purchase a new home. This important job requires many different skills and other crucial requirements. If you have been wondering how to become a mortgage loan officer, we have put together the definitive guide.


Career Basics Of Being A Mortgage Loan Officer

The job of mortgage loan officer entails helping people looking to buy a new home find the right loan. Most of the time, you will be working for a bank or other financial institution. This means that you must have a detailed knowledge of the inner workings of the bank’s policies and requirements.

To become a mortgage loan officer, you must have a mind that is built for detail-oriented work. A mortgage loan officer, also called a mortgage loan originator, must have an eye for complexity and technicalities. The work is complicated and will change based on the needs of each individual.

You will have to put together all of the applicants’ information in order to help them complete the loan application. Oftentimes, this requires you to have the people skills necessary to help the applicants compile what they need. Because of this, mortgage loan originators must have incredibly strong people skills.

As a mortgage loan officer, you will be responsible for making sure applicants are getting the right loan. You are going to want to find them one that they will be able to afford and pay in the long term. This requires a deep understanding of the applicants’ finances and ability to keep the loan in good standing.


What The Daily Life Of A Mortgage Loan Officer Looks Like

Mortgage Loan Officer daily work life

Once you become a mortgage loan originator, you will start working for an established financial institution. Some mortgage loan officers work independently, but for people who are new, it is best to get hired at a bank. That way, you can work closely with the actual organization that is providing the loan.

Most mortgage loans start with a formal meeting with the applicants. There, you will explain to them what they need in order to start the process of the loan application. This usually includes proof of income, any outstanding debts and proper identification.

Once they have gathered all of these items, you can then explain the different loans available to them. These will change based on the information that they have brought to the table. You will then explain the interest rates and other credit terms that come with the loan.

Generally, when interest rates are low, the business of mortgage loans picks up. This will be the busiest time for you as a mortgage loan originator. This is when the most people will be looking to buy a home and when you will be most in demand.

One of the most important responsibilities you will have as a mortgage loan officer is sourcing clients. Generally, you will be in charge of attracting potential loan applicants and clients. This is why it is so important that you have strong interpersonal skills.


Mortgage Loan Officer Salary and Job

What you make once you become a mortgage loan officer will depend on your own skills. Mortgage loan officers generally get paid a small percentage of the total loan amount. This means that the amount you make will be heavily dependent upon bringing in clients.

Most mortgage loan originators make 1% of the total loan amount. This might not seem like much, but with the high price of homes in some areas, it definitely adds up. For example, a million dollar home could bring in $10,000. Just a few of those a year plus some smaller loans could be very lucrative.

There are, of course exceptions. If you work directly for a bank or financial institution, you might make an hourly wage or yearly salary. That amount will depend on the institution you work for and what the wages are like in your area.

If, however, you work for an independent mortgage broker, this is when you would be getting the percentage of the loan total. With this type of commission-based compensation, you could easily make much more than a salaried position. All of this will depend on what type of person you are and how you best work.

What Mortgage Loan Officers Earn in Each State

The amount you can earn as a mortgage loan originator will depend on what the housing market is like. The higher the prices of homes are, the more you can earn while working independently. This makes the job challenging and competitive for people who are sales-minded and self-motivated.

Here are the ten states where mortgage loan officers make the most amount of money:

  • Kansas
  • Texas
  • Nebraska
  • Illinois
  • Arkansas
  • Missouri
  • Georgia
  • Virginia
  • Florida
  • New York

These states are going to have the most competitive environments for mortgage loan officers. They are housing markets that are either on the rise or are almost always booming. By working in these states, you can make the most out of your loan commissions and work consistently and steadily.


Steps To Becoming A Mortgage Loan Officer

steps to become a mortgage loan originator

If you have decided to become a mortgage loan originator, there are steps you can take towards the process. By following these steps, you can take a methodical approach and make the whole process easier. Following this step-by-step guide will ensure that you have everything you need before moving on to the next step.

Register With the National Mortgage Licensing Service

Before starting the process of getting licensed, there are several things you will need to do. First you will have to allow the NMLS to obtain your credit report. In order to be a mortgage loan originator, you have to have a clean record both credit-wise and legally.

You will also need to provide identification and submit to a background check. The NMLS will assess your eligibility before you are allowed to move forward. In order to do this, you will have to submit your fingerprints through a licensed intermediary.

You will also have to disclose all of your dealings with any financial institutions. In order to become a mortgage loan officer, you can not have any blemishes on your financial record. This is incredibly important since you will be dealing with sensitive financial information in your career.

Complete 20 Hours of Education

In order to obtain your mortgage loan officer license, you must complete 20 hours of education. These hours must include the following:

  • Three hours of law and regulations
  • Three hours of ethics
  • Two hours of lending standards
  • Twelve hours of general mortgage loan education

These hours can be completed at one of many mortgage loan officer schools. Many of these courses can be taken online and at your own pace. This is a great feature if you have another job or are getting licensed in your free time.

Pass the SAFE MLO Test

The SAFE MLO test will evaluate your knowledge of what you learned in your courses. You must pass this test with at least a 75% in order to become licensed to be a mortgage loan officer. Should you fail the first time, you must wait 30 days before attempting to take the test again.

Many people find that this is the aspect of getting licensed that they are most nervous about. In order to ensure your success, you should make sure to go to a reputable mortgage loan officer school. The more prepared you are, the more confident you will feel moving forward on the exam.

After you have passed the exam, you can then begin practicing as a mortgage loan originator. Depending on where you are working, you may have to pass separate background checks at that institution. These will be unrelated to the checks you went through at the NMLS in order to be licensed.

Complete Annual Continuing Education

You will need to annually renew your mortgage loan officer license. In order to do this, you will have to complete some continuing education courses. These will help ensure that you are up to date with the latest laws and regulations.

The continuing education classes you must take include:

  • Three hours of law
  • Two hours of ethics
  • Two hours of lending training
  • One hour of general instruction

What Education Is Needed To Become A Mortgage Loan Officer?

In order to get your license, you will have to complete the required 20 hours as well as your annual education. These hours can be completed at any accredited mortgage loan officer school of your choosing. It is important that you find the right school for you and for your schedule.

On top of these required education hours, you must also have a high school diploma. It is also recommended that you have a bachelor’s degree as well. Having a degree in business, marketing or communications will increase your chances of getting hired at a financial institution.


Skills Needed To Be A Mortgage Loan Officer

One of the most important skills that you can have as a mortgage loan officer is people skills. Knowing how to effectively communicate with clients will go a long way in your career. It can help you to help them get the loan that will best suit their needs in the long run.

Buying a home can be one of the most stressful times in a person’s life. Knowing how to best deal with people during this time is a fantastic skill for a mortgage loan originator. This is where interpersonal skills come in handy the most and will help you be effective at your job.

The process of helping a client apply for a loan is also incredibly complex. Having an eye for detail and a mind that is built for complicated problem solving is ideal. You will have to know the best ways to help people through this process and get them the best loan.

Critical thinking is another essential skill for a mortgage loan officer. Your whole job is to find a loan that will not only be right for the clients, but also the financial institution. Having the critical and mathematical thinking ability to do this is absolutely key.


Related Careers at a Glance

There are a few careers that will be closely related to a mortgage loan originator. These careers are all generally in the real estate business and your training will be useful. Real estate is a potentially lucrative industry and there are always opportunities if you are driven enough.

Real Estate Agent

Real estate agents work to help people find the home of their dreams. If you are more interested in the actual homes than the numbers and financing aspect, this is a good choice. Real estate agents are more people-oriented and deal more with the houses and clients themselves. Learn to become a real estate agent.

Real Estate Investor

Another great career for those thinking about becoming a mortgage loan officer is a real estate investor. Not only is this career more oriented to the skill set of the mortgage loan originator, it can be more lucrative. Real estate investors can stand to make quite a bit of money in a booming housing market.

Real Estate Appraiser

A real estate appraiser is a good career for anyone who is most interested in working on houses. If you do not have the people-skills required to be an agent or mortgage loan officer, appraiser is a good option. Appraisers spend time dealing with the ins and outs of the home’s condition and function. This helps sellers and buyers set a fair price for the home.


Top Mortgage Loan Officer Schools Or Courses To Get Educated

There are a number of schools where you can complete your education to become a mortgage loan officer. These schools vary in price, quality and pedigree. However, we have put together a short list of the best mortgage loan officer schools to get educated.

Hondros Education Group

Hondros Education Group offers their Learn Mortgage course to help you complete your required education. They have a catalogue of online courses that are accredited by the NMLS and will allow you to take the exam. Their course packages will give you everything you need to be eligible for your mortgage loan officer license.

They offer courses in different states throughout the U.S. There are different subtleties for every state and they know exactly what you need to get you prepared. They even offer exam prep courses for people who are nervous about taking tests.

Check out their Learn Mortgage Course here.

Allied Real Estate Schools

Allied Real Estate Schools have teamed up with Real Estate Express to offer mortgage pre-licensing courses. Because of this affiliation, they have incredibly accessible courses. They can be taken at your own pace and on your own time no matter where you are.

You can take the courses in either 14 days or 7 days. This will be dependent on what your schedule is like and what you can make time for. Not everyone has the ability to get their courses done in a week, so this is a great option.

Loan Officer School

Loan Officer School offers courses in a video format to help you become a mortgage loan originator. They have tailored these courses to be understandable and easy to follow. If you are not as academically inclined as others, this might be the best choice for you.

They offer courses at every level from the very basic to the incredibly advanced. Because of this, you can use them for your continuing education courses as well as pre-licensing. Having this one-stop-shop is very convenient for people getting licensed in their free time.


Mortgage Loan Officer FAQ

How long does it take to be a mortgage loan officer?

How long it takes you to become a mortgage loan officer will depend on your schedule and abilities. You are required to take 20 hours of pre-licensing courses in order to sit for the exam. Most schools offer this in a 7 day course or a 14 day course.

You will also have to spend time sending in all your paperwork and identification. This can take some time and should be allowed for when figuring out your timeline. Most people can be qualified to be a mortgage loan officer within a couple of months.

Is it hard to become a mortgage loan officer?

Becoming a mortgage loan officer is not necessarily difficult but it is not for everyone. There are a great deal of things to learn in order to become qualified. The job requires that you have a good grasp on finances, contracts and law.

If you are the right type of learner and personality, becoming a mortgage loan officer isn’t difficult. It can, however, be challenging for someone who is not detail-oriented or self-motivated. Knowing where you fall on this spectrum can be incredibly helpful in making your decision.

How much do mortgage loan officers earn?

The median salary for a mortgage loan officer in the United States is around $63,000 per year. It is important to note that this will be different for nearly every state in the country. Since you are usually earning a percentage of the loan, the higher that is, the higher your fee will be.

The top earners in the industry are able to make 6 figures in a year. These mortgage loan officers are usually working in high priced markets and are highly experienced. The amount you earn will depend on a lot of different factors.

Do you need a degree to be a mortgage loan officer?

You do not need a degree to become a mortgage loan officer. The only thing you need is your certification from the state and national exam. This will be enough to qualify you to be employed and give you legal standing.

However, if you would like to work for a bank or a high-performing mortgage broker, a degree helps. Having a bachelor’s in business or marketing is a good way to be put at the top of the list. Any advantage you have will end up being helpful in the long run.

What skills do you need to be a mortgage loan officer?

Having the skills to be detail-oriented and thorough go a long way when becoming a mortgage loan officer. There are many complex variations in every client’s case and you will have to decode them. This will help you get your clients the best possible loans that they can work with in the long term.

Having people skills is also incredibly helpful. You will be dealing with people going through a large purchase and that takes a certain amount of finesse. Being a good, compassionate salesperson can help you be as effective as you can be.

Is being a mortgage loan officer stressful?

This depends on what market you are working in and what institution you are working for. The job can be stressful if you have clients who are high maintenance or needy. As with any job, there are going to be many factors involved.

For the most part though, mortgage loan officers spend their days helping people navigate an exciting time. If you are someone who loves helping people, this could be a good career for you. The benefits could outweigh the stressful situations if you have the right mentality for the job.

Can you be a mortgage loan officer from home?

Many mortgage loan officers work from home depending on who they are working for. Generally, if you are working for a financial institution, you will have an office there. The clients will come to you and you do not have to spend time sourcing them.

However, there are mortgage loan originators who work out of their car and spend their days finding clients. If you work for an independent broker, this could be the case for you. It depends on your situation and employers.

How much do top mortgage loan officers make?

The top 25% of mortgage loan officers in the United States make around $93,000 or more per year. These officers tend to work in high-dollar markets like New York City or Los Angeles. These markets have higher prices and warrant officers who then make higher fees.

Do mortgage loan officers get a base salary?

Some mortgage loan officers who work for large financial institutions like banks do get paid a base wage. In these cases, they will make the same amount of money no matter how large the loans are. Because of this, many mortgage loan officers choose this route.

If you are someone who likes the stability of a base salary, a bank could be the best choice for you. However, independent mortgage loan officers have the ability to make more money from their commission. If you are success-minded and self-motivated, you may want to look into this option.

Who makes more money, a real estate agent or a mortgage loan officer?

Mortgage loan officers make a smaller percentage of the loan than a real estate agent does. In general, officers make 1% of the total loan amount, whereas realtors usually make a total of about 2%. This is once the realtor fee is split up between all the parties and entities involved in the sale.

On the other hand, mortgage loan officers usually have an easier time finding clients. Real Estate Agents have to spend more time marketing themselves and finding clients. Taking this into consideration will go a long way towards making your decision.


The Best Books and Educational Products to Help You Succeed as a Mortgage Loan Officer

There are many books available that can help you in your journey to becoming a mortgage loan officer. They are usually written by people who have been working in the business for a long time. Because of this, you can benefit from this advice and apply it to your own work.

Here is a list of some of the best books and educational products on becoming a mortgage loan officer:

Be the Better Broker, Volume 1: Become a Top Producer: A Study of Mortgage Agents, Originators & Loan Officers by Dustan Woodhouse

The Loan Officer Revolution by Rick Elmendorf

Mortgage Loan Officer Success Guide by Michael Zuren

The SAFE Mortgage Loan Originator National Exam Study Guide: Second Edition

Mortgage Lending – Loan Officer Training


Great Resources for Mortgage Loan Officers

National Association of Mortgage Brokers
Mortgage Brokers Association
Association of Independent Mortgage Experts
NMLS Resource Center

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