Ultimate Guide: How to Become a Mortgage Loan Officer in California

By Ciprian Morariu Published: May 7, 2024

How to Become a Mortgage Loan Officer in California

Want to choose a career path that offers a lucrative salary with exciting work opportunities? 

Look no further than working as a mortgage loan officer which can give your career the wings it needs to soar. 

Mortgage loan officers are highly sought-after professionals in the real estate and finance industries. 

Thanks to the high demand, loan officers are currently ranked as the 2nd most popular and preferred professions in employment surveys and job markets across the country. 

Especially in a popular real estate market like California, which is brimming with opportunities for homebuyers and investors. 

Did you know that you can easily earn upwards of $200K annually by working as a mortgage loan officer? Not to mention the additional commission opportunities that will come your way - making this an intensely rewarding career path. 

Plus, it is one of the most flexible job options available if you are someone who is seeking a better work-life balance. 

If you are interested in working in a fast-paced, dynamic profession, then this could be the ideal professional for you. 

All it takes is completing the pre-requisite conditions and fulfilling the licensing requirements and you will be all set to achieve your dream. 

Imagine earning a six-figure salary without even having a bachelor's degree as a mandatory requirement! 

If this sounds like your professional dream, then now is the time to start working towards achieving it.  

We have put together this beginner’s guide to help aspiring professionals learn everything about how to become a mortgage loan officer in California

This guide will give you a clear overview of what are the roles and responsibilities of a loan officer and the steps you need to complete to get your license. 

Plus, this guide will also cover the costs involved in becoming a loan officer so you can plan your career journey better.  

Understanding the Role of a Mortgage Loan Officer

Duties and Responsibilities of a Mortgage Loan Officer

As a mortgage loan officer in California, your day-to-day duties and responsibilities will be varied, depending on your employer and experience. 

MLOs work with financial institutions, banks, and credit unions to help borrowers find suitable mortgage plans for their home ownership needs. 

If you are an aspiring professional, you might be curious to know what exactly are the daily duties and key responsibilities of a mortgage loan officer. Let’s find out below: 

  • Collecting and organizing clients’ information, paperwork, and documentation
  • Assessing the eligibility of an individual to obtain a mortgage loan and helping qualified clients in financing their home
  • Evaluating the creditworthiness of borrowers based on their financial past and present
  • Consulting with borrowers and guiding them through the various stages of applying for a mortgage loan
  • Educating clients about the various loan packages, mortgage plans, interest rates, and loan payment terms
  • Recommending the most suitable and appropriate lending solutions to clients to meet their financial background and needs
  • Developing and promoting a portfolio of financial products and services to attract potential clients for your employer
  • Liaising with internal and external stakeholders and industry professionals such as underwriters to complete the loan application process
  • Managing and expanding a portfolio of clients and customers on behalf of a financial institution, credit union, or lending company
  • Fostering positive and trustworthy relationships with clients and addressing their queries and concerns 

Listed above are some of the most common and frequently performed tasks and duties by any mortgage loan officer. 

However, it is important to note that the above list is not exhaustive, which means, your day in the life as a loan officer in California might vary from someone who is working in Texas or Florida or any other location. 

The Importance of Mortgage Loan Officers

Mortgage loan officers (MLOs) work at the intersection of two important industries - finance and real estate. 

Many first-time homebuyers often rely on securing a loan to finance their dreams and this is where the importance of a loan officer comes into the forefront. 

MLOs are licensed professionals who help homebuyers achieve their homeownership dreams. 

For many buyers, purchasing a home means getting a mortgage loan to cover the huge financial investment. 

However, getting a mortgage loan is easier said than done. It is a time-consuming and complex task which requires going through a series of steps and following a list of rules and regulations 

Without the right financial advice and options, it would be significantly difficult for most buyers to secure financing for their homes.

Buying a home is one of the most important decisions of anyone’s life, and without loan officers, it would be difficult for most buyers to choose the right mortgage plan and payment term. 

MLOs are responsible for providing borrowers with the required information, knowledge, and advice to make the right financial decision.

An ideal mortgage loan officer not only helps their clients choose the right lending package but also works as their trusted advisor for any concerns, queries, and updates during the application process.

Getting a Mortgage Loan Originator License in California

The Process of Acquiring a Mortgage Loan Originator License

Ready to apply for a mortgage loan originator license in California and start your career? Thankfully, there exists a clear step-by-step process and path you can follow to get to your goal. 

The first step is to meet the basic statutory requirements to qualify for a MLO license in California. These are as follows: 

  • You must be at least 18 years of age or older
  • You must be a legal resident of the United States
  • You must have a high school diploma or GED equivalent in education

The second step for eligible applicants is to visit the official website of the Nationwide Multistate Licensing System and Registry (or NMLS) and create your account. 

NMLS is the country’s official database of all active mortgage license holders and professionals. 

Registering with the NMLS is a mandatory step for all applicants in California seeking to obtain and maintain their license. 

Once you have registered with the NMLS, you will receive your unique NMLS ID which will come in handy later in your licensing journey. 

The third step of acquiring a California MLO license is to complete the mandatory pre-licensing education approved by the NMLS. 

Completing the pre-licensing courses is one of the most important and must-do steps for every applicant. We will discuss it in detail in the later sections of this article. 

The fourth and final step is to gain work experience by finding a sponsoring bank, financial institution, or lending company that will be willing to hire you as an apprentice. 

Costs and Fees Associated with Licensing

When it comes to the total cost of mortgage loan originator licenses in California, multiple components add up. 

Firstly, you will have to pay the $110 fee for taking the NMLS test for Mortgage Loan Officers in California. 

The national SAFE test is mandatory and you must successfully clear it to get your license. 
Secondly, you will be required to pay a $30 charge as a processing fee for your NMLS license application. 

Next comes the background check and criminal verification charges. These require every applicant to submit their electronic fingerprints to the California Department of Real Estate (DRE). 

It will cost you roughly $36 to get your criminal background check done as a one-time fee.  

Thirdly, you will be required to submit the latest credit report along with your MLO application to the NMLS. This will require a cost of $15 as a one-time fee. 

Lastly, you will have to bear the cost of completing your pre-licensing education from a NMLS approved college or education provider. 

The pre-licensing costs vary depending on the college, school, or course provider. Further, based on the package you choose and the included features, the education costs might vary. 

Typically, NMLS-approved pre-licensing packages range from $200 to $600. 

How to Get an NMLS License in California

What is an NMLS License?

NMLS or Nationwide Mortgage Licensing System & Registry is the country’s largest authorized, maintained, and updated database of mortgage loan originators. 

It is a centralized database using which consumers can find details and information about a mortgage industry professional and companies.  

NMLS is the nationwide authority and agency for issuing and renewing licenses to professionals. 

Whenever someone receives or renews their license, it is automatically updated and reflected in the NMLS database. 

NMLS license is the industry standard for ensuring that an individual has successfully cleared the prerequisites to qualify for obtaining a license in at least one state. 

Getting an NMLS license is proof that an applicant has met all the state and federal level requirements to become a mortgage loan officer. 

Importance of NMLS License for Mortgage Loan Officers

Every successful mortgage loan originator license in California is required to comply with the NMLS licensing standards and requirements. 

Becoming a registered member of the NMLS is the only way for a professional to build trust and generate revenue opportunities. 

Most homebuyers prefer working with licensed, experienced, and skilled MLOs only, especially in a popular real estate market like California. 

They want to check the details and run a background check to avoid getting scammed in a real estate transaction. 

Having accreditation with the NMLS means an individual has met the standards and qualifications established at the state and national levels. 

Put simply, the NMLS database is the litmus test through which homebuyers and clients will validate the expertise and credibility of a mortgage loan officer. 

Hence, being an active member of the NMLS Is a must for every aspiring and experienced mortgage loan officer in California or any other state. 

Requirements for Becoming a Mortgage Loan Officer

Pre-Licensing Education Requirements

Pre-licensing education refers to the established standard of education which covers a range of courses and topics related to the mortgage industry. 

One of the most crucial MLO license requirements is completing an NMLS-approved pre-licensing course. 

In California, you are required to complete 20 hours of coursework which will equip you with the knowledge of the mortgage industry and its foundational concepts. 

There are two licensing agencies in the state of California. 

The coursework is divided into multiple subjects and topics such as: 

  • Federal Law (3 hours)
  • Real Estate Ethics (3 hours) 
  • Non-Traditional Mortgage Lending (2 hours)
  • California specific rules and laws (2 hours)