How to start a career as a mortgage loan originator in California without experience
In the mortgage lending industry, loan officers play a pivotal role in helping bridge the gap between lenders and borrowers.
For most individuals, buying a home requires getting a mortgage to fund the purchase of a high-ticket asset and achieve their homeownership dream.
Mortgage loan officers IMLOs) are professionals who work on behalf of lenders like banks, credit companies and financial institutions to help borrowers obtain mortgage financing for their needs.
Loan officers are in high-demand and as per the Bureau of Labor Statistics in the U.S., the number of job openings are going to grow exponentially.
Pursuing a career as a loan originator can be a financially rewarding and emotionally fulfilling experience, especially as you will be earning a six figure income while helping people achieve their homeownership goals.
The demand for residential real estate and housing continues to grow and so does the need for mortgage financing, especially in popular markets like California and Texas.
For most individuals, buying a home is possible only with the help of mortgage loan and financing. This is why working as a loan officer can be a promising career path.
If you are an ambitious individual who wants to work in a dynamic, exciting profession where you can enjoy a healthy work-life balance and a good pay, look no further.
Working as a mortgage loan originator is easier than you think - all you need is a minimum level of qualifying education and a mortgage loan originator license to get started.
Imagine earning generous commissions on top of lucrative base pay and working remotely from anywhere - does this sound like your professional dream come true?
If you are curious to explore the career path of a loan originator, we have put together this in-depth article to answer all your questions.
From the job profile and responsibilities to eligibility and qualifying requirements, you will learn about everything you need to know to become a licensed MLO in the U.S.
Who is a loan officer and what do they do
Think of a loan officer as the bridge between lenders and borrowers i.e. financial institutions like banks, credit companies, and homebuyers who want to obtain a loan.
The key job of a mortgage loan originator (or officer) is to assess, evaluate and approve the loan applications while determining if a borrower is eligible to receive a loan or not.
Loan officers are employed by financial institutions and they work on a base pay and commission basis.
Let’s take an example of Texas to understand the role and responsibilities of a mortgage loan officer in detail.
Imagine a Texas resident decides to buy a single-family home in Austin and the individual wants to finance their purchase to make it easier to afford.
With the help of a mortgage loan, an individual can choose to pay for their newly acquired home over a long duration of time such as 20 or 30 years.
To be able to afford a house or a residential property in Texas, home owners simply have to pay around 3 to 4 percent of the property’s value upfront and the remaining can be financed.
A mortgage loan officer helps homeowners and borrowers find, choose, and obtain the right loan to meet their needs and financial status.
Loan originators work on behalf of lenders to meet, interview and discuss and finalize potential loan options, including the payment terms and interest rates with borrowers.
If you are curious to learn more about what a typical day in the life of a mortgage loan originator (MLO) looks like, here are some of the duties and tasks you will perform.
- Follow up and respond to inquiries and queries from prospective clients and leads.
- Collect and process the required personal and financial information of borrowers.
- Analyze and evaluate tax documents, income stubs, credit reports, assets and liabilities to determine the financial profile of an individual.
- Qualify and approve loan application requests from borrowers on the basis of their creditworthiness and financial status.
- Educate clients about the various loan products, plans, terms, and processes and suggest suitable solutions/alternatives.
- Counsel clients in choosing the right mortgage loan based on their needs and financial profile.
- Assist clients in completing the loan application and procuring the required documents for getting a loan.
- Keep records of client interactions, transactions, and relevant paperwork for processing a loan application.
- Handle any queries, doubts, and inquiries from clients related to the mortgage process and loan plan.
- Navigate clients through the various stages of getting a loan and keeping them updated about the key milestones from application to closing.
- Working with underwriters, processors, loan originators, and other professionals to ensure a seamless transaction.
- Manage marketing and promotional activities on behalf of your employer and attend networking events.
Since mortgage loan officers are expected to perform a diverse set of tasks and duties, it is important to prepare yourself for the job profile.
Getting a mortgage loan originator license in Texas is the best way to equip yourself with the knowledge and skills required to work successfully and assist clients professionally.
If you are a beginner looking to start your first job without any prior experience, it is important that you complete the mandatory pre-license education to learn about the industry.
To work with clients and assist them in a suitable way, it is essential to learn about the various state and federal regulations, mortgage lending laws and best practices.
Next, let us walk you through the key steps required to obtain your Texas MLO license.
How to become a MLO in Texas
When it comes to MLO licensing requirements, every state in the country follows the guidelines established by the NMLS (Nationwide Multistate Licensing System).
The NMLS is the country’s centralized database and the highest authority for all mortgage lending firms, financial institutions and professionals working in the industry.
NMLS is responsible for issuing and renewing licenses to professionals and firms in the mortgage lending industry.
To obtain your mortgage loan originator license in Texas, you must meet the basic eligibility requirements established by the NMLS.
- You must be at least 18 years or older
- You must have a high school diploma or GED equivalent in education
- You must be a legal resident of the U.S. or a lawfully residing alien
If you meet the above statutory requirements, you can proceed to register yourself on the NMLS website and create your unique NMLS identification number.
For aspiring loan originators, the NMLS has made it mandatory to complete a minimum of 20 hours of pre license education and training.
During your pre-license training, you will have to complete the following mandatory courses:
The 20 hours of coursework covers fundamental topics and subjects such as:
- Federal Laws and Regulations (2 hours)
- Lending standards and guidelines (2 hours)
- Fair Practices and Ethics in Lending (3 hours)
- Mortgage origination related information (12 hours)
Completing pre license education will equip you with the knowledge of important laws and regulations and will give you an understanding of the industry principles and processes.
Note that some employers might require you to have a bachelor’s degree in finance, accounting, or business administration.
After completing your education, you will have to take the SAFE MLO licensing test in Texas which will consist of multiple choice questions based on the course topics.
Passing the exam is a mandatory requirement to obtain your MLO license and to do so, you must score at least 75 percent or above in the final test.
Many education providers offer exam preparation resources like simulated test attempts, mock tests, practice questions and on-demand video lectures.
The key to passing the MLO license test is to practice well and familiarize yourself with the different types of questions and their format.
Once you have passed the test successfully, the next step is to complete mandatory background verification and criminal history check.
Under the SAFE (Secure and Fair Enforcement) Act, all individuals are required to undergo a federal criminal history and background verification check.
To complete this step, you need to submit an electronic scan of your fingerprints and a latest credit report to the licensing department in Texas.
In some cases, you might also have to submit a surety bond and show a minimum net worth of $50K.
Lastly, after you have completed all the steps listed above, you will have to find a sponsoring employer and submit their details on the NMLS website.
The SAFE Act requires every newly licensed individual to work under the supervision of a state-licensed firm or professional.
Benefits of getting a MLO license
Getting a mortgage loan originator license in Texas might seem like a daunting task or an overwhelming challenge, but if you follow all the steps in a structured manner, it is a straightforward process.
Yes, it is true that getting licensed requires time, effort, and a commitment to completing the mandatory licensing requirements.
However, there are many benefits and advantages of becoming a licensed professional which should encourage you to put in the hours and cost to get your MLO license.
- You will significantly improve your employability
- You will be able to work with clients and earn commissions
- You will be able to tap into more business opportunities
- Your professional network will grow and expand without limitations
- You will be able to grow your knowledge and skills
- You will gain access to members-only communities and networking events
As an aspiring professional, getting your mortgage loan originator license is the best way to invest in your career and build a strong foundation for the future.
Licensed professionals are considered more skilled, committed and trustworthy by clients and getting your MLO license will translate into higher earnings and more opportunities.