How to Become a Licensed Loan Officer in Texas
Loan officers are in high demand in Texas, thanks to the state’s booming real estate and strong economic outlook.
Most homebuyers rely on a mortgage to achieve their ownership goals and this is why the opportunities for mortgage loan officers (MLOs) are increasing.
The Bureau of Labor Statistics in the U.S. projects that loan officer is the 2nd most sought-after job role in the country.
If you are a resident of Texas and want to work in a dynamic, high-growth industry, working as a loan officer might be a great career choice for you.
Due to the growth in job opportunities and high earning potential, pursuing the career path of a licensed loan officer is a good option, especially if you seek a promising profession.
Mortgage loan officers (MLOs) are licensed professionals who work with banks, credit unions, and lending companies to help consumers secure mortgage financing.
Did you know that the top loan officers in Texas can make as much as $120K in annual income while enjoying a flexible work-life balance and additional job perks?
Whether a consumer is buying a new home or refinancing an existing property, loan officers play an integral role in originating funds and suggesting suitable mortgage plans for clients.
Like most states, Texas also requires aspiring loan officers to meet a specific set of state and federal eligibility requirements.
To work in the mortgage lending industry in Texas, one must apply for and obtain a valid mortgage loan originator license as it is a mandatory requirement.
A license allows you to work anywhere in the state of TX without restrictions so you can assist clients and earn commissions.
Getting a license might seem overwhelming to beginners but if you follow the step-by-step process, it can be easily completed.
To help you get started in the right direction, we have put together this in-depth article which covers all the steps on how to become a licensed mortgage loan officer in Texas.
What does a mortgage loan officer do?
Before we take a deep dive into how to become a licensed loan originator in TX, let us walk you through the basics of the job profile of a loan officer.
Mortgage loan originators can be considered as the bridge between lenders and borrowers - however, they do more than just sign documents and push paperwork.
A mortgage loan officer is the go-to professional for assisting consumers and clients choose the right mortgage product, plan, and service.
Your job will focus on assisting borrowers at different stages of getting a mortgage loan - from filling up the application to comparing the various mortgage plans and additional tasks:
- Meet and interview prospects and potential clients who are seeking mortgage options for their needs.
- Understand the financing needs and mortgage requirements of individuals who want to finance a new or existing property.
- Collect and organize personal, financial, and credit documents and paperwork from borrowers searching for a mortgage.
- Assess the financial worthiness and health of borrowers based on their credit history, income, and other factors such as income, taxation, etc.
- Educate clients about the various mortgage plans and explain the specific mortgage terms, payment schedules, and interest rates as per the suitable products.
- Review the loan applications submitted by borrowers and ensure they are compliant with the state and federal regulations and industry standards.
- Guide clients across the different stages of getting the mortgage - right from comparing loan plans to applying for a loan and securing the financing.
- Respond to client queries and clarify their doubts regarding their mortgage plan, interest rates, payment terms, tenure, and refinancing options.
The job of a loan officer involves a mix of accounting, pre-sales, customer relationship management and finance in one.
Since you will be completing a diverse range of tasks as part of your job profile, it is important to complete mandatory education by enrolling in a mortgage loan originator course and gaining the required training.
If you are still evaluating the pros and cons of working as a loan officer, there are many exciting advantages to pursuing this career path. Let’s discuss them below:
- Mortgage loan officers are expert professionals responsible for helping aspiring homeowners achieve their goals. By working with lenders and borrowers, loan officers act as enablers and facilitators helping people realize their dreams.
- As a loan officer, you will be the go-to person who will act as a guide for borrowers who want to navigate through the process of completing and submitting documents required for getting a mortgage.
- Working as a loan officer, you will have the power and flexibility to approve or reject loan applications. This will give you a position of power and authority in your career.
- MLOs enjoy a stable work-life balance with opportunities to work remotely as well. This means you can easily manage both personal and professional lives without compromising on your career or family.
We hope by now you should be clear about the rewarding opportunities that await you as a loan originator in Texas.
Let us now walk you through what it takes to achieve this goal and embark on a journey of a fulfilling and lucrative career path where it pays to do good work.
Minimum eligibility criteria to become a licensed loan officer
To become a licensed loan officer, the first step is to meet the NMLS (Nationwide Multistate Licensing System).
NMLS is the regulatory authority responsible for granting and renewing licenses to mortgage loan originators in the country. It is also the country’s largest database of industry professionals such as mortgage brokers, loan officers, and lending firms.
Now, before we discuss the state-specific licensing and education requirements, let us give you an overview of the statutory requirements.
As per the NMLS licensing guidelines, you must meet the minimum eligibility requirements to apply for an MLO license in Texas. These are:
- Be at least 18 years of age or older.
- Be a legal resident of the United States or a lawfully admitted alien.
- Have a high school diploma or GED equivalent in education.
Meeting the above requirements is a must and if you are certain about your eligibility, you can create your NMLS account and obtain your unique NMLS identification number.
Complete pre-license education for an MLO license
Like any other profession, you must complete minimum education to understand your job duties and offer your professional assistance and skills to clients and consumers.
As per the NMLS, every aspiring loan officer must complete a minimum of 20 hours of pre-license education by enrolling in an MLO license course in their state.
In Texas, you are required to complete an additional 3 hours of course credits covering Texas-specific laws and regulations.
Completing pre-license education is a mandatory requirement under the S.A.F.E (Secure and Fair Enforcement Act) for every aspiring professional who wants to work in the mortgage lending industry.
The pre-license coursework is formulated to give you the knowledge and skills you need to work with clients and build a successful career.
Let’s take a look at some of the course topics you will cover during 23 hours of education:
- Federal Law (3 hours)
- Ethics (3 hours)
- Non-traditional mortgage lending (2 hours)
- General Electives (12 hours)
- Texas-specific state laws (3 hours)
You must keep an important factor in mind - to become a licensed MLO in Texas, you must choose an NMLS-approved education provider only.
If your pre-license college or course provider does not meet the SAFE standards, then your pre-licensing coursework will not be approved by the NMLS.
Luckily, there are numerous options available for students to choose from - you are free to decide your preferred medium of learning i.e. you can join an in-person, physical classroom-based college or enroll in an online mortgage licensing course based on your needs.
Pass the MLO license exam in Texas
Many students wonder whether pre-licensing education offers any practical benefits instead of being a mandatory requirement to be ticked off a checklist.
One of the most important reasons why you must take mortgage loan originator license courses seriously is that they can help you boost your preparation for the license exam.
As per the NMLS license guidelines for loan originators, passing the S.A.F.E MLO license test is mandatory for every student to obtain a license.
The exam consists of 120 multiple-choice questions. It will cover both state and national-specific portions based on the courses in your pre-license education curriculum and will test your knowledge of lending principles, industry laws, and regulations.
You will get a total of 180 minutes to complete the test and to pass the test, you must score at least 75 percent or above.
Note that it will cost you $110 to take the test and complete your examination. If you are unable to clear the test on your first attempt, you can reattempt the test after 24 hours.
Clear background verification
After successfully passing the SAFE MLO test, the next step is to clear federal background verification and criminal history checks.
In Texas, aspiring MLOs are required to submit an electronic scan of their fingerprints along with an updated credit report for verification purposes and background checks.
The NMLS requires applicants to clear the verification and meet the standards of honesty, integrity, truthfulness, and good moral conduct.
To complete this step, you can schedule an appointment for a live fingerprint scan at any of the NMLS-approved live scan vendors in Texas.
Note that the cost of getting your background verification and credit report will be around $50.
Once you have assembled all the required documents, you can visit the NMLS website and log in to your account with your credentials to submit them for review.
Find employer sponsorship
If you have successfully completed all the above steps, you will receive your Texas MLO license within a few days.
However, to start working with clients, you must activate your license. To do so, you must find a sponsoring loan officer or a lender licensed in the state of Texas.
The NMLS requires newly licensed loan officers to gain practical industry experience with senior, more experienced professionals.
As per the NMLS guidelines for newly licensed professionals, you must submit employer sponsorship details to activate your MLO license in Texas.
To do so, you need to work under the supervision of a Texas-based employer in the mortgage lending industry who would be willing to sponsor your employment.
After you find a sponsoring employer in Texas, you can log in to the NMLS portal and submit the employer sponsorship details for review and approval.