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How To Become A Mortgage Loan Officer (In 7 Easy Steps!)

If you’ve been thinking about a new career path, becoming a mortgage loan officer may have crossed your mind. After all, it can provide a substantial amount of income month-to-month. This is a good career if you’re interested in the real estate market and have a knack for sales. Trying to find out how to become a mortgage loan officer? Here are the steps you should follow.

How To Become A Mortgage Loan Officer

The steps in this article will teach you how to become a mortgage loan officer. But keep in mind to always check what your state laws and requirements are. Each state is different, but your state can help you find the right tools you’ll need.

Before we dive into the steps, let’s talk about what a mortgage loan officer is, what they do, and why you can make a great career out of becoming one.

How to become a mortgage loan officer...and is it worth it?What does a mortgage loan officer do?

The job description for a mortgage loan officer varies depending on your state, position, and even company. However, for the most part, a mortgage loan officer assists a borrower with purchasing or refinancing a home or commercial real estate.

Many loan officers are employed by employers like banks, mortgage companies, and credit unions.

The day to day tasks include:

  • assisting borrowers with the best loan programs,
  • compiling loan applications,
  • and communicating with other people involved in the home buying process, like underwriters and escrow officers.

Related: The Mortgage Process: Understanding the Home Loan Process

Is it hard to become a mortgage loan officer?

Let’s say you’re getting interested in this career field. How likely is it though? Is it difficult to become a mortgage loan officer?

Yes and no.

For the most part, it just requires some studying, patience, and a few paid fees. But some states are more strict than others, so it’s important to always follow your state’s regulations and rules.

Overall, becoming a mortgage loan officer can be as hard or as easy as you make it. If you’re willing to put in the work to get licensed, you can build a lucrative career.

How do mortgage loan officers get paid?

Most mortgage loan officers are paid a percentage of whatever the house is sold for. So for example, if the company you work for pays a 1% commission, and you work on a house that sold for $500,000, you’ll get $5,000 for that sale.
Some companies also offer base pay, although this isn’t always the case. Once you’ve been licensed, decide how you want to get paid, and only search for jobs that offer that criteria.

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Are loan officers in demand?

Is the job of a mortgage loan officer prevalent? Is it in high demand?

Yes, and the demand is only going to continue to grow. As long as houses are being sold, mortgage loan officers will be needed.

How Do I Start a Career as a Mortgage Loan Officer?

These steps should provide nearly all of the information you need to get started. And of course, don’t forget to check your state’s resources to get the best information that pertains to you.

Registering With The NMLS Is A Must

According to the federal Secure and Fair Enforcement Act for Mortgage Licensing Act (SAFE Act), those wishing to become a mortgage loan officer must register with the Nationwide Mortgage Licensing System and Registry (NMLS).

The NMLS is a database that provides essential information on loan officers, allowing for state regulators to easily track them and ensure they’re remaining compliant with
both federal and state requirements.

Receive At Least 20 Hours Of Pre-Licensure Education

A key step to becoming a mortgage loan officer is completing a 20-hour pre-licensing education course that’s approved by the NMLS.

This course will cover various topics, including:

  • Federal laws and regulations regarding mortgage loans, plus ethical practices that provide instruction on consumer protection, fair lending, and fraud
  • Instruction on originating mortgages

And that’s just to name a few.

The knowledge gathered from this course should adequately prepare you for the NMLS mortgage exam.

Remember That Different States Have Different Requirements

Each state has specific education requirements that you must also adhere to. For instance, an MLO license in California requires 20 hours of pre-licensing education and an additional two hours for state specific courses. So, it’s important to think about where you’re going to work as a loan officer in order to receive the proper education.

Looking for how to become a mortgage loan officer in your state?

There are plenty of websites that will walk you through exactly what you need to do for your specific state.

Pass The NMLS Mortgage Exam

To finally obtain your license, you’ll have to pass the NMLS mortgage exam with a score of at least 75%. This exam is challenging and will ask specific questions regarding federal and state mortgage lending laws.

If you don’t pass the first or second time, you’ll have to wait 30 days before you can retake it. And, if you don’t pass on your third try, you’ll be required to wait 180 days before taking the test again.

Despite how rigorous it is, it’s an important step in becoming a mortgage loan officer as it ensures you’re qualified to practice your trade.

should you get a financial advisorNo, You Don’t Need A Specific Degree

One of the best parts about becoming a mortgage loan officer is that you don’t need to have a specific degree to get started. While a background in finance, economics, banking, or business is helpful, it’s not a requirement.

Instead, anybody wishing to switch up their career path and become involved in the mortgage industry can do so as long as they have a valid mortgage loan origination license.

Related: Top 12 Best Paying Jobs in Finance

Remember That Salaries Vary

Becoming a mortgage loan officer can be a lucrative career path that can leave individuals earning more than six figures annually. On average, loan officers make about $179,000 a year in the United States.

However, this salary can vary depending on several factors, such as how many loans you close in any given year and current real estate trends. In Alaska, for example, the salary for loan officers is 26% less than the national average.

Related: When Should You Invest In Real Estate? Opportunity Coming Soon??

You Have To Renew Your License Every Year

You’ll need to renew your license every year to keep it up to date and continue practicing as a loan officer. This means completing eight hours of continuing education courses that are NMLS-approved.

Should You Become A Mortgage Loan Officer?

Becoming a loan officer is no easy feat, and there are several considerations to keep in mind before taking the plunge into this new career. Use the tips mentioned in this article to help you decide whether this is the right career for you.

Would becoming a mortgage loan officer be the right career move for you?

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AUTHOR Kimberly Studdard

Kim Studdard is a project manager for online entrepreneurs and small businesses. When she isn't spending time with her daughter and husband, or reading her growing pile of horror books, you'll find her working on her HR degree and working towards FIRE.

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