Step By Step Guide on How To Become a Mortgage Loan Officer in Texas
If you are in Texas and want to be a part of a dynamic industry, working as a mortgage loan officer could be an ideal career.
Mortgage loan officers (MLOs) are licensed professionals who are responsible for helping clients finance their new homes.
Read on if you are keen to pursue this career and want to know how to become a mortgage loan officer Texas.
Mortgage brokers and loan officers are governed by various federal and state agencies and regulatory bodies, including the NMLS (Nationwide Multistate Licensing System). Only licensed professionals are legally allowed to offer mortgage loans and assistance to borrowers.
Getting an MLO (Mortgage Loan Officer) license is mandatory to work with financial institutions, private lenders, and credit companies in Texas.
Working as a licensed loan officer in TX can be financially rewarding and emotionally fulfilling. You can make a six-figure income annually while helping clients achieve their dream of homeownership.
Are you already thinking about how do I become a mortgage broker in Texas and what it takes to start a career? Keep on reading to find all the answers to your questions.
Understanding the job profile of a Mortgage Loan Officer
To become a licensed mortgage loan officer in Texas, you must first understand the job profile.
A Mortgage Loan Officer (MLO) is a licensed professional who is employed by lenders, such as banks and loan companies.
Loan officers act as a bridge between lenders and borrowers. They help borrowers obtain mortgage loans for financing a new home or an existing one.
Your job as an MLO in Texas is to guide, assist, and navigate your clients through the various stages of getting a mortgage loan.
By liaising with lenders, you will ensure that your clients get the best deals and interest rates.
The job profile of a mortgage loan officer includes administrative, operational, and client-servicing duties.
- Responding to client inquiries and meeting prospects
- Filling out the loan application and submitting supporting documents
- Evaluating the financial health of prospects and determining their creditworthiness
- Research about various financial products and loan plans
- Explaining interest rates and mortgage terms to clients
- Present the different mortgage payment plans to clients
- Applying for a suitable mortgage plan on behalf of your clients
- Following up with underwriters and loan originators
- Negotiating on behalf of your clients for the best deals
MLOs help borrowers navigate the process with ease and confidence by working with borrowers throughout the financing journey.
Loan originators earn a fixed commission of around 1 to 2 percent of the loan amount. The average annual salary for an MLO in Texas is around $100K with few years of experience
Plus, there are additional commission opportunities worth tens of thousands up for grabs.
A mortgage loan officer has a strong grasp of the financials and interest rates in the industry.
Before we dive deeper into the Texas MLO license requirements, let us check the need and purpose of a license.
Why do you need a license to become a loan originator
Under the S.A.F.E. (Secure and Fair Enforcement) Act of 2008, only licensed professionals are legally allowed to work as an MLO. You must also meet the minimum ethical and regulatory standards set by the NMLS.
The NMLS (Nationwide Multistate Licensing System) is the country’s largest database and centralized authority for all licensed mortgage brokers and loan officers. If you are thinking, how do I become a mortgage broker in Texas, you must be prepared to meet all the NMLS license guidelines.
Since loan officers are employed by financial institutions, getting licensed is mandatory to be compliant with state and federal laws. Without a valid MLO license in TX, you will not find employment opportunities or be legally allowed to work with clients.
What are the minimum qualifying requirements for a Texas MLO license
If you are keen to know more about how to become a mortgage loan originator in Texas, the first step is to meet the minimum requirements and prove your eligibility.
As per the NMLS guidelines, here are the minimum qualifying requirements:
- 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.
If you meet the above eligibility requirements, you must register with the National Mortgage Licensing Service (NMLS) next.
What are the Texas MLO license education requirements
Keen to pursue a career in the mortgage lending industry, but are not sure how to become a mortgage broker in Texas?
Completing pre-license education from an NMLS-approved education provider is an essential step to get licensed. Pre-license education consists of mandatory courses that cover the key fundamentals and core concepts of the mortgage industry. You must know its underlying frameworks, principles, and various processes.
Completing pre-license courses will equip you with the knowledge of Texas and federal laws, ethics, fair policies, and consumer rights.
If you are thinking about how to become a mortgage loan officer in Texas, complete 23 hours of pre-license credits, which include the following courses:
- General Electives (12 hours)
- Federal Laws and Regulations (2 hours)
- Fair practices, fraud protection, and ethics in mortgage lending (3 hours)
- Lending standards and principles (2 hours)
- Texas-specific state laws and regulations (3 hours)
The Nationwide Multistate Licensing System (NMLS) states that all applicants must join an NMLS-approved education provider. You can, however, choose your preferred medium of education; either an in-person, physical classroom or an online course.
After completing 23 hours of NMLS-approved course credits, you will become eligible to apply for your Texas MLO license online.
Steps to apply for a MLO license in Texas
If you are wondering how do I become a mortgage broker in Texas easily, go through the process step by step.
First, register with the NMLS and obtain your unique NMLS identification number. Use it to log into your account when required. After registration, complete your pre-license education to gain the required training and knowledge.
After completing your course credits, you will have to take the Texas MLO license test, which, under the S.A.F.E. Act, is a mandatory requirement for all applicants.
The test consists of 115 multiple-choice questions in total, covering both state and national-specific portions, and you will get 180 minutes to complete all the questions.
After passing the licensing exam with a 70% minimum grade, apply for an MLO license on the NMLS portal. For many students, passing the SAFE MLO test on their first attempt is daunting. To overcome this challenge, enroll in exam prep courses and specialized classes to prepare for the test.
Next, complete background verification and pass the criminal history check. Under the S.A.F.E. Act, only applicants who pass the standards for ethics, honesty, and truthfulness can apply for a licence. Submit an electronic scan of your fingerprints taken at a live scan vendor in Texas along with the latest credit report.
A one-time, non-refundable fee of $325 is payable to NMLS to process your license application. After documents are verified and background checked, you will receive your Texas loan officer license within a few weeks.
However, there is one last step you must complete in order to enter the mortgage lending industry as a licensed professional. You must activate your newly obtained license, by finding an employer sponsorship in TX.
As per the NMLS license guidelines for professionals, you are required by law to work under the supervision and guidance of senior, more experienced brokers, or firms. It will help you gain practical industry experience on how to assist clients and conclude deals.
After finding sponsorship, log into the NMLS portal and submit your employer sponsorship details to activate your license.
By now, you should have gotten the answer to the question how to become a mortgage loan officer in Texas. Remember that the whole process might seem difficult or overwhelming in the beginning.