A Guide to Becoming a Mortgage Loan Officer – All That You Need to Know

By Ciprian Morariu Published: February 23, 2024

Becoming a Mortgage Loan Officer

Introduction to a Mortgage Loan Officer

Are you good with math and finance and interested in increasing your earning potential?

Do you wish to be a part of a dynamic, diverse, and rewarding industry and help other people? If yes, become a Mortgage Loan Officer and launch a successful career. 

The demand for skilled and knowledgeable mortgage loan officers has been growing and now is a good time to make a thriving career in the industry. 

So, how do you go about it?

To get a mortgage loan originator license, the basic requirement is to go through a mortgage licensing course. This MLO online course can be studied at your convenience from anywhere while on the go. After completing this course, pass the MLO licensing exam and launch a successful career as an MLO.

If you want to know how much mortgage loan officers make in a year, the answer is about $90K annually.

Typically, the salary range for a licensed loan officer falls between $70K to $111K - imagine earning such a handsome salary while getting a chance to help people buy their dream home! 

Plus, you get to work in a flexible career with a steady income and potential for growth. 

We have put together this in-depth guide to help you understand everything about how to apply for a Mortgage loan officer license and what you will need to succeed.  

Definition of a Mortgage Loan Officer

The main role of a licensed Mortgage Loan Officer or MLO is to assist people find the best mortgage loan option that matches their requirements. An MLO therefore is the link between lending institutions and potential borrowers.  

Whenever an individual or a family is looking to buy a home or real estate, the first person they look for is a mortgage loan officer. After all, it is very rare that a buyer will pay the entire price for a home upfront without financing it. 

A mortgage loan officer is a licensed real estate professional who guides, assists, and navigates home buyers through the different stages of obtaining a mortgage loan, from application to closing. For this, an MLO must be aware of the various loan options available to borrowers. 

Ideally, a mortgage loan officer is someone who has a strong grasp of the financials and interest rates in the industry and is knowledgeable to help their clients pick the right loan. An MLO is a licensed professional typically employed in banks or similar lending institutions.  

The Functioning of Mortgage Loan Officers

From the outside, it seems like only real estate agents, brokers, and realtors are the ones responsible for running and growing the industry. 

However, there are many other job roles, such as a mortgage loan officer, who are also helping customers achieve their real estate dreams. 

A mortgage loan officer is often the first point of contact whenever a loan process needs to be initiated. They are the gatekeepers who are entrusted by the banks and lending institutions to assist borrowers in the mortgage process. 

Given below are a few of a mortgage loan officer’s duties and responsibilities. 

  1. Prepare the loan application: This is one of the key responsibilities of a mortgage loan officer as they help vet and prepare the information required for filling out the different sections of a loan application. MLOs ensure that every information you submit is accurate and help you avoid any inconsistencies or misses. 
  2. Advise the best loan program: A mortgage loan officer works as an advisor and an advocate for their client, helping them choose and finalize the most suitable loan program. It is the job of the loan officer to provide a comparison of the different options available based on the financial background and needs of their clients. 
  3. Submit the required paperwork: Getting a mortgage loan requires the submission of several financial and personal documents such as income proofs and tax documents. A loan officer guides their clients on what documents to include in their loan application and how to prepare their application for fast approval. 
  4. Help negotiate the best interest rates: A skilled and knowledgeable mortgage loan officer assists their clients in negotiating the terms of the mortgage loan program, including the interest rates and closing costs. They provide expert advice on the different terms and conditions of repayment based on the needs of their clients. 
  5. Track the loan application: A mortgage loan officer’s job does not end after submitting the loan application, as they are also involved in the tracking of the application status. A loan officer provides timely updates for important milestones to keep their clients on track for repayment and to avoid missing any payment or renewal dates.
Mortgage Loan Officer

Becoming a Mortgage Loan Officer

Steps to Become a Mortgage Loan Officer

Becoming a mortgage loan officer requires going through a step-by-step process with careful planning and consideration. 

This journey usually takes between 45 to 60 days and comprises the following steps: 

Step 1: Earn a high school degree or diploma

Having a college degree is a must, preferably in the field of finance, accounting, or business as they can provide you with the background you need to succeed. 

Step 2: Meet the pre-licensing requirements

Every aspiring MLO must complete specific hours of pre-licensing courses as stipulated by the National Mortgage Licensing Service (NMLS). 

The NMLS requires applicants to complete specific pre-licensing courses for a total duration of 20 hours. 

Below are some of the courses you will need to complete as part of your pre-licensure training: 

  • Real Estate Financing
  • Fair Ethics
  • State and Federal Laws
  • Loan Products
  • Underwriting
  • Financial Regulations

These courses will give you a fundamental understanding of the real estate industry, its rules and regulations, and the role of financial institutions. 

Plus, you will also learn about key concepts to help you familiarize yourself with the workings of a mortgage loan officer. 

In addition to completing the pre-licensing education, the NMLS will also ask you to submit proof of your background verification and criminal history record. 

Step 3: Pass the NMLS licensing exam

After completing your pre-licensing education, the next step is to take and successfully clear the NMLS licensing exam. 

Also known as the SAFE (Secure and Fair Reinforcement) test which is designed to evaluate your preparedness and knowledge of the topics which you have studied in your pre-licensing training. 

To pass this test, you must score a minimum of 75% in your final score. 

Note that some states might have additional state-specific requirements which must be fulfilled. 

Step 4: Obtain a mortgage origination license

Congratulations on clearing the licensing exam successfully! You are now one step closer to becoming a licensed mortgage loan officer. 

For the next step, you have to reach out to your state’s real estate authority to issue a mortgage origination license. 

Note that you will have to pay a one-time fee for getting your license. It is recommended that you check the updated guidelines issued by your state. 

Step 5: Register with the NMLS

Every MLO must be registered with the National Mortgage Licensing Service (NMLS). 

Once you do so, you will receive a unique NMLS identification number registered with your license and details. 

Step 6: Find a sponsorship

Simply getting an NMLS-approved license is not enough to kickstart your career as a mortgage loan officer - you must also seek sponsorship from an employer or an institution. 

This step is mandatory and every new license holder must find a job with an established and authorized lender, broker, or financial institution. 

Step 7: Maintain your license

The final step towards becoming (or maintaining) your real estate license is by continuing your education and completing the post-licensing courses. 

Completing continuing education is required to renew your license and maintain it. It will help you to stay updated with the latest developments in your field. 

This keeps your license active and current and keeps you abreast with the industry’s practices, laws, and regulations. 

Additionally, you may also choose to pursue specialized courses and certifications to expand your knowledge and skill set. 

Mortgage Loan Officer Duties and Responsibilities

Loan Processing

Processing loan applications and ensuring the disbursement of funds are among the most important mortgage loan officer duties and responsibilities. 

A mortgage loan officer is in charge of initiating the loan application process on behalf of their client and evaluating the available financing options. 

In the event of a lack of suitable financing options, a loan officer might suggest alternative methods for loan financing. 

Additionally, an MLO also explains the different types of loans available to borrowers to help them decide about the terms of their mortgage. 

Customer Service

While customer service might not be the core job responsibility of a mortgage loan officer, it is an integral part of their work. 

From helping with loan documentation to evaluating the various financing options - a loan officer is present at every stage of the process including pre-approval and underwriting to closing. 

Financial Analysis

A mortgage loan officer is expected to conduct a detailed financial analysis of their client’s income, credit history, tax reports, expenses, and other monetary aspects. 

Based on this financial analysis, a mortgage loan officer can assess the different options available and assist the client in choosing one 

A knowledgeable and skilled MLO will also educate their clients on how to choose the right mortgage loan based on the interest rates, closing costs, and loan duration.