How do I become an independent mortgage advisor?

To advise clients independently, you need both an individual mortgage loan originator license and a state mortgage broker company license. The individual steps are registering with the Nationwide Multistate Licensing System (NMLS), completing 20 hours of approved pre-licensing education, passing the SAFE MLO Test with at least 75%, and clearing background and credit checks. Independent practice also means founding a licensed brokerage, since originators must generally be sponsored by a licensed company, which involves a Company Form (MU1) filing, a surety bond, and state-specific requirements.

To work independently as a mortgage advisor in California you must hold a real estate broker license with an MLO endorsement. A sole proprietor performing mortgage loan origination files both a Company (MU1) form and an Individual (MU4) form through NMLS. Salespersons cannot operate independently; they may hold only one affiliation at a time and must work under a licensed broker.

In Florida, independent mortgage advising means working as a self-employed loan originator, which requires the standard loan originator license: you must be at least 18 with a high school diploma or equivalent, complete 20 hours of NMLS-approved prelicensing education, pass the SAFE mortgage test, and file your application through NMLS. A licensed loan originator may act as an independent contractor for a mortgage broker or lender, but may not contract with more than one at a time.

In New Hampshire, an MLO license takes effect only when the originator is sponsored by a licensed mortgage banker or broker, and no originator may represent more than one. To operate independently, you would need a New Hampshire Mortgage Broker License, filed through NMLS. It requires $25,000 in positive net worth at all times, an electronic surety bond, and a qualifying individual employed full-time in a supervisory role with at least 3 of the preceding 5 years in the mortgage business. A sole proprietor licensed as a broker must also hold an originator license.

In New Mexico, independence changes your licensing obligations. A loan processor or underwriter who is an independent contractor, rather than a W-2 employee, must hold an MLO license. An independent contractor who originates loans without sponsorship from a licensed New Mexico mortgage loan company must obtain a license under the Mortgage Loan Company Act and carry an individual surety bond of at least $50,000, since a company's bond covers only employed or sponsored MLOs.

In New York, an independent mortgage advisor operates as a registered mortgage broker. You must register with the New York State Department of Financial Services (DFS) through the Nationwide Multistate Licensing System (NMLS), pay a $1,500 application fee, and file a surety bond of at least $10,000. Your firm must also designate a qualifying individual with two years of credit analysis or underwriting experience, and that person must hold a mortgage loan originator license. Registered brokers must place loans with licensed mortgage bankers or exempt organizations rather than lend directly.

West Virginia has no unsponsored independent route. You complete 24 hours of approved prelicensing education, pass the NMLS test with at least 75%, and file the application with the $200 fee plus fingerprint and NMLS processing costs. A licensed lender or broker must submit sponsorship through NMLS at the time of the license request, so an independent advisor needs a sponsoring company as part of the application. Independent-contractor loan processors and underwriters must also hold the license.