Your guide to becoming a licensed loan officer in Texas
The dream of home ownership knows no boundaries of price or budget, especially when it has become so much easier to finance a large ticket purchase like a house.
Today, homebuyers prefer seeking a mortgage to fund their dream of buying a new home or refinancing an existing one.
For millions of aspiring homeowners, the key to realizing their dream is through securing a mortgage that can cover the expenses and living costs.
This is where mortgage loan officers come into the picture as specialized professionals responsible for helping individuals navigate through the stages of getting a mortgage.
Mortgage loan officers (MLOs) are licensed professionals who work on behalf of lenders and creditors to assist borrowers in choosing the right loan and financing options.
Did you know that MLOs are highly sought-after in the industry and the career outlook for skilled loan officers is expected to grow in the coming decade?
In Texas, the top MLOs can make as much as $120K annually while enjoying a flexible schedule and a better work-life balance than many conventional nine-to-five professions.
Imagine earning a six-figure income while working in a fast, dynamic profession with growing job opportunities.
For anyone who is looking for a stable, high-paying career where you can be of help to others, working as a mortgage loan originator in Texas can be a good fit for your goals.
To start your career, you need to obtain a mortgage loan originator license in Texas as this is an essential requirement for working with clients.
Getting a license might seem complicated but it is a step-by-step process that can be easily completed if you are dedicated and determined to start a career.
If you are keen to explore the path of working in the mortgage lending industry, we have put together this in-depth guide to help you get started.
In this article, we will outline all the key aspects of becoming a licensed loan officer - from education and job duties to mandatory requirements and the state licensing exam.
Why do you need a mortgage loan originator license?
As Texas continues to attract homebuyers and migrants from across the country, more individuals and consumers are looking for financial services and assistance.
Thanks to the low mortgage interest rates and a growing job market, the demand for residential real estate is growing strongly in Texas.
As a result of this, the need for loans and financing services is also increasing which means now is a good time to get your MLO license in Texas.
Before we dive deeper into the specific steps in getting licensed, let us take a step back and understand the need for a license in the first place.
The mortgage and lending industry is heavily regulated and is governed by a pre-established set of state and federal laws for working professionals in all states.
In 2008, the SAFE (Secure and Fair Enforcement) Act was established to protect the interests of consumers and borrowers and prevent fraudulent and unlawful activities.
Under the SAFE Act, it is the duty of the NMLS (Nationwide Multistate Licensing System) to ensure that all aspiring and existing professionals have a state-issued MLO license.
The purpose of the licensing system is to ensure that only professional, knowledgeable, and skilled individuals with good moral character are allowed to work with clients.
As a result of this, getting a mortgage loan originator license is a mandatory requirement in all states, including Texas, for anyone who wants to work with clients.
Getting an MLO license is mandatory if you want to be employed by financial institutions, lenders, and banks and work with borrowers.
If you are still on the fence about whether to apply for an MLO license or not, here are some key advantages of getting licensed for your career growth.
- You will attract more clients and significantly improve your earning potential
- You will be able to serve a diverse clientele across a broader market segment
- Your professional network will grow exponentially
- You will become more knowledgeable and expand your skill set
- You will get more job opportunities from the leading employers
A mortgage originator license is an official badge of your competence, knowledge, and education which is required to provide financial assistance to clients.
Next, let us walk you through what it means to be a mortgage loan officer and what a typical day in the life of an MLO looks like.
The job profile of a mortgage loan officer
Many people assume that mortgage loan officers are simply custodians for loans and financial products, however, they do more than just sign papers and push documents.
As an aspiring MLO in Texas, your day-to-day job responsibilities will vary depending on your employer, however, you can expect to perform certain tasks and duties such as:
- Meet and interview individuals and potential clients who are interested in comparing various mortgage loans for their needs.
- Understand the specific needs and financing requirements of individuals who want to finance their property purchase.
- Collect and procure personal, financial, and credit-related information and stipulations of borrowers who are searching for a suitable mortgage loan.
- Evaluate the financial health and creditworthiness of borrowers based on their credit history, income, and other factors.
- Review the loan applications submitted by borrowers and ensure they are complete.
- Suggest the various types of loan plans and explain the specific mortgage terms, payment schedules, and interest rates as per the suitable products.
- Assist your clients through the various stages of getting the mortgage - right from evaluating loan options to applying for a loan and completing paperwork.
- Answer client questions and clarify any doubts related to the mortgage plan, payment terms, interest rates, loan tenure, and refinancing options.
- Act as a liaison between the lender and the borrower by bridging the gap between the two and coordinating a seamless loan closing process.
- Nurture client relationships throughout the mortgage journey i.e. before, during, and after the mortgage is secured.
- Maintain regulatory compliance with the NMLS guidelines as well as the state and federal laws for credit providers.
As evident, mortgage loan officers perform a mix of administrative, accounting, and customer service-specific duties.
If you are seeking a flexible work-life balance and want to work independently, then a career as a mortgage loan officer can work wonders for you.
Basic eligibility requirements for Mortgage loan officers
The NMLS (Nationwide Multistate Licensing System) is the authority that grants and renews licenses to mortgage loan originators in the country.
As per the NMLS licensing guidelines, all applicants must meet the minimum eligibility requirements to apply for a mortgage loan originator license. They are as follows:
- You must be at least 18 years of age or older
- You must have a high school diploma or GED in education
- You must be a legal resident of the United States or a lawfully residing alien
If you fulfill the above criteria, you must register with the NMLS and create an account on the Texas mortgage registry website.
Note that some employers might require applicants to obtain a bachelor’s degree in business administration, accounting, or finance.
Once you create an account, you will receive your unique NMLS identification number which you must keep handy for further use.
How to obtain your MLO license in Texas
To become a licensed MLO in Texas, you must complete a step-by-step process that will take you from being an aspirant to working in the mortgage lending industry.
The first step in your licensing journey is completing the mandatory education and training required to work as a licensed loan officer.
After creating your NMLS account, you must complete a minimum of 23 hours of NMLS-approved pre-licensing education to qualify for a license.
Completing 20 hours of NMLS pre-licensing education is a common qualifying requirement across all the states.
In Texas, you need to complete an additional 3 hours of mortgage loan originator course to meet state-specific training requirements.
The coursework is designed to equip students with the knowledge required to work with clients and will provide the necessary skills you need to build a successful career.
Some of the common courses you will cover during your pre-licensing education are:
- Federal Law (3 hours)
- Ethics (3 hours)
- Non-traditional mortgage lending (2 hours)
- General Electives (12 hours)
- Texas-specific state laws (3 hours)
After you complete your mandatory coursework, you can proceed to the next step of the process which is taking the MLO licensing test.
The exam consists of 120 multiple-choice questions based on the courses and topics included in your pre-licensing education curriculum. Note that it will cost you $110 to take the test and complete your examination.
To obtain your license, you must pass the SAFE MLO test in Texas and you must score at least 75 percent or above to do so.
If you pass the SAFE MLO test successfully, you can proceed to complete and submit your MLO licensing application to the NMLS for review and approval.
Along with your application, you also need to submit an electronic scan of your fingerprints taken at a live scan vendor in Texas.
To schedule an appointment for a live fingerprint scan, you need to log into the NMLS website using your unique ID and pick a suitable date and time.
It is mandatory for all aspiring mortgage loan officers to clear the federal criminal history and background verification check. It will cost you around $37 to complete this step.
The NMLS wants to ensure that every applicant passes the standards for ethics, honesty, and truthfulness before getting an MLO license.
Note that you will have to pay a $325 application processing fee as you submit your licensing application through the NMLS licensing portal.
Lastly, to activate your Texas MLO license, you need to find employer sponsorship which is another mandatory requirement by the NMLS for industry professionals.
The NMLS requires all newly licensed professionals to work under the supervision of a licensed firm/employer in Texas.
This way you can learn about the industry work and gain practical, real-world experience to advance in your career.
After you find a suitable employer who will be willing to sponsor you, you need to log into the NMLS portal and submit your employer sponsorship details.
Additionally, you might have to submit a few additional documents and the NMLS will reach out to your employer to verify and approve your sponsorship documents.
Once your sponsorship documents are approved by the NMLS, you will be on your way to embark on a rewarding and fulfilling career as a licensed mortgage loan officer in Texas.