Your Guide to Becoming a Mortgage Loan Officer in Texas

By Ciprian Morariu Published: May 8, 2024

Buying a home is a dream come true for many, especially if they are buying their first home.

However, home buying is a big purchase and it requires a significant amount of money and financial investment.

In order to achieve their homeownership dreams, many individuals prefer going through the route of obtaining a mortgage loan. It is here that they must link up with a mortgage loan officer who can help them navigate the complexities of getting a mortgage loan.

As a mortgage loan officer, your most important responsibility will be to act as a mediator and enabler between the lender and the borrower.

This is especially true in the booming real estate landscape of Texas which continues to attract homebuyers and investors.

On average, a MLO in Texas can earn around $100K annually after a few years of work experience.

With an MLO license, you can work with lenders and financial institutions anywhere in the state of Texas.

Are you ready to start an exciting and rewarding career at the intersection of real estate and finance?

It is important to understand that working as a mortgage loan officer requires completing strict educational requirements established by the Nationwide Multistate Licensing System (NMLS).

In this article, we are going to give you a detailed deep on how to become a mortgage loan officer in Texas. You will learn about the requirements and the steps involved in getting your license.

Introduction to Becoming a Mortgage Loan Officer in Texas

What Does a Mortgage Loan Officer Do?

A mortgage loan officer is a licensed professional who is responsible for helping their clients purchase a home through mortgage loans.

One of the most important duties of a mortgage loan officer is to assist and counsel their clients through the various stages of getting a loan.

From collecting paperwork and submitting the loan application to suggesting various loan options and suitable payment terms - a MLO’s daily tasks can vary a lot depending on your employer.

However, there are specific tasks that will remain the same for every mortgage loan officer.

Let’s take a look at some of the daily job duties and responsibilities of a mortgage loan officer:

Receiving, assessing, and processing loan applications
Assist clients in preparing all the necessary documents and paperwork
Vetting and verifying the information provided by the borrower on a loan application form
Assist clients in avoiding the potential issues and complications arising in a loan application
Evaluating the creditworthiness of borrowers based on their credit history and financial past and present reports
Determining the most suitable and appropriate loan programs to meet the borrower’s needs and financial health
Consulting and educating borrowers regarding different financial services, loan options, interest rates, and payment terms
Ensure compliance with state and federal-level laws and regulations
Help negotiate the best loan terms and mortgage payment terms on behalf of the clients
Update clients on the timelines and other important updates related to the status of their loan application

To sum it up, as a mortgage loan officer, your job will encompass the administrative, financial, and operational aspects of helping your client secure the best mortgage loan plan.

Now that we have discussed what a day in life will look like as a MLO, let us take a look at some of the reasons why choosing this career path is worth it.

Why Should You Prefer a Career As A Mortgage Loan Officer?

A career as a mortgage loan officer in Texas will give you the opportunity to earn good money and achieve your monetary goals in life.

As per data from the U.S. Bureau of Labor Statistics, a new mortgage loan office earns an annual income of around $65K.

Many MLOs are able to reach a six-figure annual salary after working for a few years in the industry.

In Texas, the average salary of a mortgage loan officer is around $150-200K in a year. For experienced MLOs with more than five years of experience, the salary can go as high as $250K annually.

Your salary will vary depending on your employer and other factors such as location and your skill set. You can earn a flat salary or get a commission on the basis of the property’s final selling price.

However, in a popular real estate market like Texas, working as a mortgage loan officer can be rewarding and lucrative financially.

If you are someone who likes the idea of helping others, then you can do so as a mortgage loan officer.

One of your key job responsibilities will include assisting borrowers to achieve their home ownership dreams.

Getting a mortgage is an integral part of the home buying journey and loan officers play a pivotal role in helping people finance their dream home.

How Do You Become A Mortgage Loan Officer in Texas

Education Requirements

Ready to apply for a mortgage loan originator license in Texas? If yes, meet the eligibility criteria as laid down by the Nationwide Mortgage Licensing System (NMLS).

First and foremost, you must complete the basic educational requirements to become a licensed mortgage loan officer in Texas.

As per the NMLS, every applicant must:

Be at least 18 years of age or older
Have a high school diploma or a GED

Taking math and finance subjects in school helps to gain an understanding of real-world skills which will come in handy in your career.

Although it is not mandatory, many employers such as financial institutions, credit unions, and banks prefer hiring employees with a bachelor's degree in finance, economics, and accounting.

Next, you must complete a set of pre-established courses and educational requirements.

The NMLS requires every applicant to complete the mandatory 20 hours of pre-licensing education from a state-approved college or education provider.

These courses will cover the basics of working in the mortgage and finance industry. Some of the topics you will cover include:

Real estate finance
State and Federal rules, regulations and laws
Mortgage industry principles
Lending standards and best practices
Fair ethics and fraudulent practices
Consumer rights and protection

Necessary Skills and Personal Attributes

Many aspiring real estate professionals often focus solely on the MLO license requirements and not enough on the auxiliary skills needed to make a successful career.

In order to make a name for yourself and carve a promising reputation, you need to learn and master some of the most in-demand skills. Let’s take a detailed look at them below:

1. Analytical skills:

As a mortgage loan officer, your job will require processing and analyzing a lot of information at the same time.

From credit reports to tax records, you will have to work through data to evaluate and qualify borrowers based on their income and financial past and present.

Working on your analytical skills will come in handy as it will help you make sense of vast amounts of information and objectively process it to make accurate decisions.

2. Communication skills:

In order to work with clients and assist them through the various stages of getting a mortgage loan, you must polish your communication skills.

As a mortgage loan officer, your job will require you to guide borrowers at each step of their mortgage loan journey.

This means you will have to communicate with them regarding the loan options, payment plans, interest rates, and more.

Further, having clear and smooth communication skills will help you answer clients’ questions with more confidence.

3. Customer service:

One of the underrated professional traits that makes loan officers stand out from the competition is a knack for being customer-friendly.

Mortgage loan officers are required to work with borrowers to help them work through the different aspects of obtaining a mortgage loan.

Being customer-friendly is a skill that will help you build rapport with your clients and earn their trust.

Many first-time homebuyers find it difficult to go through the various policies, procedures, and processes.

They often need the assistance and support of an experienced loan officer who can be with them at different steps of the journey.

Building positive relationships with your clients will help your career in a major way.

How to Acquire the Mortgage Loan Originator License in Texas

Exam and Application Process

To get your mortgage loan originator license in Texas, you are required to take and clear the examination, also known as the SAFE (Secure and Fair Enforcement Act) test.

The SAFE test is formulated to test your understanding of the key fundamentals such as real estate rules, finance regulations, and other state and federal laws.

You will cover all of these subjects during your pre-licensing education.

The test consists of 115 multiple-choice questions and each applicant will get 3 hours to complete the test.

Clearing the SAFE test is mandatory for every applicant and to do so, you must score at least 75 percent or above in the final test.

You will have to pay an exam fee of $110 to take the test. In case you do not clear the exam, you can retake it after waiting for a period of 30 days.

Next, let us take a look at the application process to become a licensed mortgage loan officer in Texas. Below are the steps you need to follow:

Register yourself with the NMLS by creating an account.
Provide electronic fingerprints and other IDs to complete the criminal background check.
Disclose any prior charges reported by any financial institution or agency
Provide proof of completion of the pre-licensing education
Submit a credit report along with an individual form (MU4).
Provide proof of employment through an employment verification form.

Licensing Fee and Renewal Process

Now that you know how to become a mortgage loan officer in Texas, let us give you an overview of the specific costs involved in the process.

First comes the licensing fee which is around $325 for a Texas-OCCC license and $45 for a Texas SML license.

To renew your license, you must complete eight hours of continuing education every year from a NMLS approved course provider.

Necessary Experience

If you are an aspiring MLO, here’s an important fact to keep in consideration - finding an employer sponsorship is a must to activate your MLO license.

According to the NMLS, every applicant must find a sponsoring employer and get their application verified by their employer.