How to Become a Mortgage Loan Officer (25 Best Ways & Tips)

You can learn how to become a Mortgage Loan Officer from reading this very insightful and helpful article.

It includes lots of ways and tips to help you become a Mortgage Loan Officer.

 

Importance of Mortgage Loan Officers

To make a purchase in the 100,000’s of dollars price range is a big step and commitment for just about anybody.

The reality is that buying a home is the biggest purchase that any citizen of any country will make.

Often, the loan spans 20 to 30 years of payments at a set amount which includes which goes towards principal and interest.

When entering these high stake waters, it is important to have an individual who can navigate you through the process to provide you with the best interest rates that are offered by a variety of lenders.

Such an individual that can help others through this mortgage process would be the professional guide known as a mortgage loan officer.

Ultimately, the purchase of a home is good for the economy of the country, provides a good return on a lender’s money, and ultimately helps a family or individual realize the American dream.

The professional role of a mortgage loan officer is critical in all of these areas.

While we draw up the papers let us take a look at what it takes to become a mortgage loan officer.

 

25 Best Ways & Tips to Help You Become a Mortgage Loan Officer

 

1. Know all about being a Mortgage Loan Officer

A mortgage loan officer is a representative of a financial institution who is licensed and helps consumers with their mortgage or home loan applications.

Examples of financial institutions could include:

• Mortgage broker
• Mortgage Bank
• Institutional Bank
• Credit Union

 

2. Know What a Mortgage Loan Officer Does

A mortgage loan owner facilitates the purchasing of a home by a consumer by helping in the loan process.

They have also been involved in the offers as well as the actual process of negotiating the terms of the home loan.

There is a fee charged by the mortgage loan officer in this process.

The primary role of a mortgage loan officer is to take the information of the individual wishing to purchase a home and match their financial profile to mortgages that are offered and try to achieve the best rate at the lowest cost.

A mortgage loan officer in addition to helping the client apply for a new mortgage may also be involved in refinancing a current one.

 

3. Qualifications

The role of a mortgage loan officer requires the accumulation of volumes of information from potential borrowers as it relates to the mortgage that is being applied for.

This information can be extremely sensitive and therefore needs to be handled with the strictest confidentiality.

In addition to being professional with the information that is shared, it is important that you as a mortgage loan officer are organized and that all of the information provided is presented accurately to lending institutions.

 

4. Pay

Mortgage loan officers can be paid in two ways.

One way is by being paid a flat salary for the work that they accomplish.

The other way that a mortgage loan officer can be paid is through a commission which is based on a percentage of the loan amount.

However, the mortgage loan officer cannot be paid based on the loan terms.

 

5. Responsibilities

The responsibility of the mortgage loan officer is to be intricately involved in the primary stages for an individual to obtain a mortgage.

Those stages include the loan officer helping the customer with the

Initial loan application,

Sharing with the customer the various options available

Provide counsel on any corrective actions that need to be pursued if credit is not available.

The loan officer will also bring together all of the needed loan documents and work with a title company or escrow service in the completion of the home sale.

 

6. Personal Qualities

In order to be a quality mortgage loan officer, there are certain personality traits or qualities that you should exhibit.

Those qualities include:

• Good communication skills
• Being straightforward
• Sales ability
• Decisiveness

 

7. Financial Character

In addition, to have quality and sterling personal characteristics, it is also important that the mortgage loan officer also meet certain financial requirements.

They must have a clear background check and have not been convicted of any criminal activity.

The potential of being rejected as a mortgage loan officer can occur if:

• The candidate has criminal activity especially related to fraud
• Poor credit history
• Any history of foreclosure or other significant lack of debt payment
• Licensure that was revoked in other states

 

8. Become an Assistant

Many banks have loyalty programs in which an individual who shows potential and begins working with a financial institution may be offered the opportunity for continuing education through the bank.

The bank, investing in their financial career and if the individual agrees to work for the bank may assist with educational needs and promotions.

Also, you may be provided the opportunity to “shadow” a loan officer to learn what the job of being a mortgage loan officer requires.

 

9. Customer Service

An important component to be a mortgage loan officer and one that will prove to move you in the right direction in your successful career path is to provide quality customer service.

This means that you will be working daily with customers and alleviating their concerns and answering all of their questions satisfactorily.

This is due to the fact that ownership of a home is the most significant and largest purchase that an individual is likely to make in their lifetime and can cause some financial worry and stress.

 

10. Degree

To be a mortgage loan officer does not require an academic or formal degree.

However, it may be helpful to have an advanced degree in a discipline that would serve you in the financial world.

Many smaller institutions would consider providing you with the opportunity to learn the business and allow for on-the-job training to occur.

Most likely, larger institutions generally require a bachelor’s degree in a related field.

 

11. Sales Ability

Another aspect of being a quality loan mortgage loan officer is the ability to interact with the customer as it relates to sales.

Once a loan has been approved by a lending institution it is then up to the mortgage loan officer to provide the terms, facts, and figures to the customer and present the loan and guide the customer through the process.

Again, this can be a very intimidating and apprehensive moment for the customer and therefore the sales ability of the loan officer will help the customer through the process.

 

12. Detail-Oriented

The potential mortgage loan officer needs to give importance to and understand and demonstrate the criticalness of being detail-oriented.

By being detail-oriented it means that in the contractual agreement all of the I’s need to be dotted and the T’s crossed to ensure that there are no issues as it relates to compliance.

Additionally, it is important that the mortgage loan officer understands this detail as it relates to correctly entering the numbers and ensuring that there is no transposition of numbers as this may jeopardize the loan for the applicant.

 

13. Decisive

Another important aspect or ability for the mortgage loan officer is the ability to be decisive.

This decisiveness comes into play as it relates to the loan that is being offered and the customer’s ability to pay back the loan.

The decision on whether to approve or disapprove the loan will be based upon all of the factors that you take into consideration and then making a decision or recommendation as to whether the loan should be moved forward.

 

Training

 

14. License

To be a mortgage loan officer requires that you are licensed.

Each state has its own requirements as it relates to issuing a mortgage loan officer their license as the state agencies are the ones to issue the license.

However, there is a federally mandated requirement that requires the individual to be familiar with the Federal Security And Fair Enforcement Act For Mortgage Licensing of 2008.

In most states you will be required to:

• Provide fingerprints for a background check
• Financial services employment history for the past 10 years
• If there are any financial regulatory charges pending
• Attest to the accuracy of the information

 

15. Pre-Licensure Education

An important step in becoming a mortgage loan officer is the completion of courses required by

NMLS (National Mortgage Licensing Service).

This organization is the primary regulatory body for mortgage loan officers and offers significant useful information as well as specific requirements per state for licensing.

The website for this organization is https://nationwidelicensingsystem.org.

The courses consist of:

• Three hours of studying federal law and regulations
• Three hours of ethics
• Two hours of training as per the standards required
• 12 hours of instruction on mortgage origination

Also, each state brings its own unique requirements to the mortgage table which can require learning about reverse mortgages and warning signs that stand out on a mortgage application.

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16. NMLS Requirement

Other requirements include a sponsorship component.

This means that the individual mortgage loan officer’s involvement must have oversight by his or her employer.

State regulators provide the final approval for sponsorships.

Another requirement is known as NMLS unique identifier.

This identifier is a specific number that is assigned permanently to a company, branch, or individual who has an NMLS account.

The idea behind this unique number is to provide better monitoring and tracking for the companies involved and the individual licensee.

This unique identifier is required to be listed in all advertisements or any origination services as it relates to the processing of a mortgage.

The final requirement is that an applicant is required to pay a fee.

The fee structure varies on the state of residency.

 

17. Certifications

In addition to obtaining the licensing, the American Bankers Association (ABA) offers different certifications.

Those certifications include:

• Certified Financial marketing professional
• Certified Lender Business Banker
• Certified Trust and Financial Advisor

Also See: How to Become an LIC Agent.

 

18. Safe MLO Test

Individuals who have applied to be a mortgage loan officer for licensing are required to pass the SAFE MLO Test.

The test is designed to determine your knowledge of federal and state mortgage lending laws.

This test is designed so that the applicant only needs to take it once which also allows for the licensees to apply for licensure in other states in the event that they move professionally.

 

19. Pass Test

The minimum score to be qualified or to be a passing grade is at least a score of 75%.

 

20. Timing

If an individual fails to reach the acceptable level of passing, there is a waiting period of 30 days before the test can be retaken.

If the individual is not able to pass within three attempts, they must wait six months before taking the test again.

 

21. Afterward

After the training, the taking of the tests, passing the tests, and paying your fees, you will receive your license.

Once you receive your license you can begin your work as a mortgage loan officer.

Some mortgage loan officers work independently but often those just starting out in the business prefer the option of working with a business that is already established.

Such businesses would include:

• Bank
• Credit union
• Mortgage lending institution.

 

22. Maintaining License

As with all things, obtaining a license does not mean that you are set in your career as a mortgage loan officer for the rest of your professional career path.

There are requirements that the individual needs to maintain to keep her active status and your licensing.

Specifically, the license needs to be reviewed and renewed annually and this is accomplished by taking continuing education classes and keeping all of your information as it relates to registering with NMLS and staying up-to-date.

For example, if you move to a new employment position, NMLS needs to be made aware of this move.

 

23. Continuing Education

As it relates to continuing education, mortgage loan officers are required to complete an eight-course study that is NMLS approved and this needs to be accomplished annually.

If an individual or you as the mortgage loan officer fails to meet this standard of renewal you may end up losing your license.

Also, continuing education is required in the areas of

• Three hours of reviewing federal law and regulations
• Two hours of ethics
• Two hours of training related to lending standards
• And more

 

24. Change of Employment

In addition to alerting NMLS if you have a change in employment, you need to notify this organization of:

• Being arrested or any legal troubles
• Being involved in bankruptcy

 

25. Timing

The average length of time that it takes to complete all of the necessary requirements, taking tests, submission of paperwork, etc to become a mortgage loan officer is roughly 45 days.

It is important to remember that each state is different as to what they require, and the length of time needed may vary on either end of that 45 days.

 

Personal Story

At the peak of the most recent housing boom, around 2006, we had taken on a new job in a progressive city that boasted of a robust economy and equally robust housing sector.

I, a little bit more adventuresome, and my wife, with her feet firmly planted on the ground, decided to look around and see what some of the offerings were.

One of the sectors of the housing industry that we looked at was the potential of purchasing a condominium.

On one occasion we walked with a group of other people and were shown around this condominium complex that had all of the bells, whistles, and amenities that anybody could want.

The realtor shared all about the possibilities and what a good opportunity was being presented and gave the price.

Some quick figuring in my head helps me to realize that it might be doable for us to make the transaction.

While trying to figure all this out my wife kept nudging me and asking me to ask her a question.

Finally, I gave in and my wife asked the question my wife wanted to be posed.

The question is how much is the HOA?

The realtor responded by saying the monthly amount.

The next thing I knew everybody in our group had cleared out.

Fortunately, I have a wife who does not have her head in the clouds and was able to prompt me to ask that question as for me I didn’t even know what an HOA was.

Jokingly, my wife and I tell everybody that the realtors have requested that I not bring my wife with me anymore when we are looking at real estate.

 

FAQs

 

What Questions Should I Ask When Looking to Utilize a Mortgage Loan Officer?

Some of the important questions to ask a mortgage loan officer before agreeing to conduct business with him or her include

How much experience they have new line work hours new line how communication will occur new line why their company should be chosen

 

Similar to Obtaining Bids From Various Companies for a Large Project, How Many Loan Officers Should I Contact?

A good rule of thumb as it relates to how many loan officers to contact for your mortgage five seems three to five seems to be the standard range.

 

You Can Do It

A mortgage loan officer is a critical keystone to the realization of helping families to achieve their dreams.

Through your knowledge, experience, and rigorous passing of tests you can receive your license in helping others to cross the threshold of their new home.

 

Conclusion

To become a mortgage loan officer is a rigorous process and could, on the surface, seem overwhelming with all that is involved.

However, when you consider the amounts of money being loaned for a new home and the financial obligations being placed on a potential new homeowner, it is always best to protect all involved and be as thorough and extensive as possible.

Becoming a mortgage officer is a detailed and intricate process but certainly is called for given this purchase of a significant item that for many is the most expensive purchase of their lives.