Understanding the Educational Requirements for Texas MLO License Renewal
A career in the mortgage financing industry is exciting and rewarding and is in high demand,
In the U.S., skilled loan officers are highly sought after and it is projected that there will be a steady growth in job opportunities in the coming decade.
If you are in Texas and aspire to become part of a financially lucrative profession, a career as a mortgage loan officer might be a great option.
Mortgage loan officers (MLOs) are licensed professionals equipped with the responsibility of helping individuals and companies secure financing for purchasing real estate.
In the journey of buying a home or a property, MLOs play a pivotal role in originating funds and enabling the most suitable financing plan for their clients.
As Texas’s real estate market continues to grow steadily and attract homebuyers and migrants from around the country, there are more people interested in financing their homes.
Due to a growing need for housing and real estate financing, loan officers are highly employable by banks, credit unions, and mortgage companies.
You would be surprised to know that a loan officer is currently ranked among the top five growing careers with the potential to earn a six-figure salary while having the flexibility to work remotely.
If you are ready to earn more and enjoy a flexible work-life balance, now is a good time to start your career as a MLO.
In case you are wondering, no you do not necessarily require a bachelor’s degree in finance or accounting to become a licensed loan officer.
However, you must fulfill the eligibility and educational requirements to obtain your MLO license in Texas.
Like most states, Texas also requires applicants to complete qualifying education to become eligible for a license. A license allows you to work anywhere in the state of TX.
To help you get started, we have put together this guide which covers all the steps on how to become a loan officer.
Plus, you will learn in detail about the qualifying educational requirements to become a licensed loan officer in Texas so you can prepare yourself for the next steps.
Who is a Mortgage Loan Officer
A Mortgage Loan Officer or a MLO is a professional who works with lenders such as credit companies, financial institutions, and loan providers to provide financing to consumers.
MLOs act as enablers and facilitators who work on behalf of their clients to obtain loans for purchasing a home.
The core job responsibility of a loan officer is to act as a bridge between financial institutions and homeowners looking for a mortgage loan.
The process of filing paperwork, researching loan options, understanding payment terms, and applying for a suitable mortgage plan is cumbersome and complex.
MLOs help borrowers navigate through the process with ease and confidence by working with borrowers throughout the financing journey.
Did you know that the average annual salary for a MLO in Texas is around $100K after a few years of industry experience?
Plus, there are additional commission opportunities worth tens of thousands up for grabs.
Ideally, a mortgage loan officer is someone who has a strong grasp of the financials and interest rates in the industry and is knowledgeable to help their clients pick the right loan.
The Role of a Mortgage Loan Officer
A mortgage loan officer is often the first point of contact whenever a loan process needs to be initiated or executed.
Before we get into the details of how to start a career as a mortgage loan officer, let’s take a step back to understand what exactly the job role entails.
Here are some of the key job duties and core responsibilities of a loan officer.
- Meet and interview prospective clients to understand their requirements
- Assist in the collection and submission of required paperwork for loan application
- Evaluate the financial history of individuals to determine their credit-worthiness
- Explain the different mortgage payment plans to meet client needs
- Determine and suggest the most suitable mortgage plans, terms, and interest rates
- Provide financial assistance and guidance in choosing from various mortgage plans
- Negotiate the best mortgage terms, rates, and payment plans on behalf of clients
- Assist and counsel clients through the different steps for obtaining a mortgage loan
- Act as an intermediary between the lenders and the borrowers
- Ensure a smooth and secure loan closing procedure
- Liaison with mortgage brokers, attorneys, and appraisers
- Research about the mortgage industry market and emerging trends
- Maintain compliance with the state and NMLS guidelines and regulations
Clearly, you will be juggling multiple administrative, operations, and financial tasks on a daily basis.
The job of a MLO requires dealing with financial and private information while working in a highly regulated environment.
Since loan officers are employed by banks, credit unions, and financial institutions, it is mandatory to ensure compliance with the licensing laws and guidelines.
A mortgage license is legal proof that you have acquired the required knowledge and education to provide financial guidance and assistance to clients.
This is why it is important to acquire the right knowledge and complete background verification to earn your mortgage loan originator license in Texas.
Eligibility Criteria to become a Mortgage Loan Officer
Now that you have learned about the job role and duties of working as a loan officer, the next step is to prepare yourself for getting an NMLS (Nationwide Multistate Licensing System) license.
NMLS is the country’s largest database and centralized authority for all licensed mortgage brokers, loan officers, and financial services providers.
Now, before we discuss the state-specific licensing and education requirements, let us give you an overview of the statutory requirements.
To become eligible for applying for getting your mortgage originator license in Texas you must:
- 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 criteria is a must and if you have successfully fulfilled all the above requirements, you can proceed to the next step.
Educational Requirements for a Texas MLO License
As the next step, you must obtain the educational training to work as a loan officer.
It is important to demonstrate financial knowledge and understanding of industry regulations as a licensed professional and earn your mortgage license in Texas.
Although having a bachelor’s degree is not a mandatory requirement, it certainly helps to have some fundamental understanding of mathematics, accounting, and finance in general.
The NMLS requires every applicant to complete the mandatory 20 hours of pre-licensing education to equip themselves with the knowledge and understanding of the mortgage and financing industry.
The 20 hours pre-licensing curriculum covers fundamental topics and courses such as:
- Federal Laws and Regulations (2 hours)
- Fair Practices, Fraud Protection, and Ethics in Mortgage Lending (3 hours)
- Lending standards and principles (2 hours)
- General Electives (12 hours)
To obtain a mortgage license in Texas, you must complete an additional 3 hours of Texas SML SAFE courses covering state-specific laws and regulations for mortgage loan officers.
Note that to become a licensed MLO, you must choose an NMLS-approved education provider for your pre-licensing education.
If your real estate college or course provider is not approved by the NMLS, then your pre-licensing course credits will not be considered legitimate.
The Nationwide Multistate Licensing System (NMLS) has made it mandatory for all applicants to meet the educational standards and guidelines for loan officers.
With that said, you are completely free and flexible to choose your preferred medium of learning i.e. you can choose between in-person classroom learning or virtual, online classes.
Many students prefer learning in an online environment as it offers more flexibility, convenience, and time savings in comparison to physical, classroom-based learning.
How to apply for a Texas MLO license
If you are curious to know about the steps to earn your mortgage loan license in Texas then we have outlined them for your reference.
Step 1: Meet the basic eligibility requirements
Meeting the statutory requirements is the starting point of your journey to becoming a mortgage loan officer in the United States.
All applicants must be at least 18 years of age, have a valid SSN and proof of residence in the U.S., and must have completed high school education or GED equivalent.
Having a bachelor’s degree is a huge plus, preferably in the field of finance, accounting, or business as they can provide you with the background you need to succeed.
Step 2: Create your NMLS account and verify your information
Like most states, Texas also relies on the NMLS system to issue and update the licenses of MLOs in the state.
Thus, you need to visit the NMLS website and register using your information.
Once you do that, you will receive a unique NMLS ID which you can use to log into your account as and when required.
Step 3: Complete NMLS-approved pre-licensing education
According to the (NMLS), all applicants are required to complete 20 hours of mandatory pre-licensing training to qualify for an MLO license.
For residents of Texas, you also need to complete 3 hours of additional education covering state-specific courses.
Pre-licensing education will help you learn about the workings of the mortgage and financing industry and prepare for the next step of your licensing journey.
Step 4: Take and pass the SAFE (Secure and Fair Enforcement) test
After completing NMLS-approved pre-licensing education, you can schedule the SAFE (Secure and Fair Enforcement Act) test.
Taking and clearing the SAFE test is mandatory for applicants, irrespective of where they are located.
The test consists of a total of 115 multiple-choice questions covering both state and national -specific portions. You will get 180 minutes to complete the test.
To pass the exam, you must score at least 75 percent or above.
Step 5: Complete the NMLS background check and identity verification
Texas requires aspiring MLOs to submit electronic fingerprints along with their credit report for background and criminal history verification purposes.
You can submit your application along with the required documents and an individual form (MU4) on the NMLS website.
Step 6: Find sponsorship and activate your MLO license.
Lastly, to activate your MLO license in Texas, you must submit proof of employer sponsorship to the NMLS.
If you complete the above steps successfully, you will be able to legally work as a mortgage loan officer anywhere in the state of Texas.
Usually, it would take anywhere between 45 to 60 days to complete all the qualifying requirements and submit your MLO application to the NMLS.