Your guide to starting a profitable career as a Mortgage Loan Originator
So you want to join a thriving industry where opportunities for income are aplenty and work-life balance is easily achievable.
If you are seeking a career path where you can generate a six-figure annual salary and work with challenges, then working as a mortgage loan originator might just be the right one for you.
Mortgage loan originators (MLOs) are professionals who help individuals and companies obtain mortgage loans or financing for purchasing real estate.
Loan originators typically work with financial institutions like banks, credit companies, and other lenders to help borrowers secure funding according to their mortgage needs.
This career path not only provides lucrative earnings but also offers the satisfaction of helping people achieve their homeownership dreams.
Since the demand for housing in the country has been growing steadily post-pandemic, the need for skilled, experienced mortgage loan originators has also been increasing rapidly.
The Bureau of Labor Statistics in the U.S. estimates that the job outlook for MLOs is poised to grow steadily by around 3 percent and an estimated 30K new jobs will be added in the coming decade.
To sum it up - working as a mortgage loan originator offers numerous benefits and advantages - the pay is great, there is work-life flexibility and you can enjoy a rewarding career.
However, to get started in the industry and find your first job, you must meet a specific set of requirements and eligibility criteria.
Most importantly, you must fulfill state-specific educational requirements by completing an MLO license course and obtaining a license.
If you are excited to be a part of this growing industry and give shape to your dream of earning a six-figure income, now is the time.
To help you get started, we have put together this guide which covers all the important aspects of becoming an MLO.
From education and examination to licensing and beyond, we will answer all your frequently asked questions.
After reading this article, you will be able to make an informed choice about working in this profession.
Who is a Mortgage Loan Originator
A mortgage loan originator is a licensed professional responsible for liaising between lenders and borrowers.
Mortgage loan originators are sometimes also referred to as mortgage loan officers as these terms are often used interchangeably.
Both loan originators and loan officers work to help consumers obtain mortgage loans for completing a home purchase.
Loan originators are responsible for accepting loan applications and acting as the source of the funds.
Loan officers typically work on behalf of loan originators like banks or financial institutions to assist borrowers in securing the loan.
For the sake of brevity and simplicity, we are going to refer to the job duties, responsibilities, and licensing requirements to become a mortgage loan officer.
What is a MLO license
A mortgage loan originator license is a legal tender that allows loan originators or officers to assist individuals and companies in securing financing and funding for their needs.
A MLO license allows individuals and companies to perform their duties and help potential clients choose and secure the right financial products and services.
Since loan originators and officers work with sensitive financial and personal information of clients, they are required to meet the specific standards for such professionals.
It is the authority of the Nationwide Multistate Licensing System (NMLS), a centralized licensing system, to regulate the licensure of all state loan officers, brokers, and mortgage companies.
Irrespective of which state you belong to, you must adhere to the NMLS licensing requirements and standards for loan officers and originators.
In most states, getting an MLO license is mandatory for anyone who wants to work in the mortgage lending industry and assist consumers in making financial decisions.
It is a regulatory requirement for all professionals, firms, and institutions who deal with consumers in the matter of obtaining residential mortgage loans.
Understanding the job of a Mortgage Loan Officer
The job of a mortgage loan officer involves juggling multiple administrative, operational, and customer-oriented tasks.
From interacting with clients to dealing with underwriters, your exact daily duties might vary depending on your employer as not all MLOs follow the same work routine.
To give you an overview of what the job role entails, listed below are some of the most commonly performed responsibilities of mortgage loan officers.
- Responding to texts, emails, and phone calls to answer inquiries from potential clients
- Following up and meeting with prospective clients to understand their needs
- Interviewing prospective clients to discuss their financing goals and aspirations
- Collecting all the required paperwork and documentation for a loan application
- Go through financial records like income stubs, credit reports, assets, and tax returns
- Evaluate the creditworthiness and financial health of prospective clients
- Educate clients about the potential mortgage plans and payment options
- Assist clients in selecting the most suitable mortgage financing plan or product
- Help complete the loan application and required paperwork to secure financing
- Work with underwriters, property appraisers, and stakeholders to facilitate the process
- Prioritize the best interests of your clients through the stages of applying for a loan
- Store and organize the important paperwork and documentation of the transaction
- Guide clients on how to ensure timely mortgage payments and important milestones
- Research industry updates, emerging markets, and economic trends
- Attending networking events and professional meetups for loan originators
From pre-qualifying clients by assessing their creditworthiness to helping them move through the various stages of securing a loan, the job of an MLO is to act as the guiding hand for clients.
The goal of a mortgage loan originator is the same as a loan officer - to help clients navigate the steps involved in applying for and obtaining a loan in a seamless, professional manner.
Since loan originators work through multiple steps and stages of the loan process with their clients, they are required to cultivate a specific set of skills and acquire the minimum qualifying knowledge and training.
Later in this article, we will talk in detail about the importance of completing mortgage loan originator license courses and why they are beneficial for aspiring loan originators.
But before we get to that, let us give you an overview of some of the desirable skills and traits of successful MLOs.
Ideal Skills to Become a Mortgage Loan Originator
Simply completing pre-licensing education and obtaining an MLO license will not get you too far in the field.
To succeed as a loan originator in the industry, you need to develop a skill set that can help you navigate through the various duties and responsibilities with confidence and professionalism.
Here are some of the common skills and useful traits exhibited by successful MLOs
- Good communication and strong interpersonal abilities
- Proven domain knowledge of finance, accounting, and lending
- Ability to work in a deadline-oriented, time-critical environment
- Strong attention to detail and organizational skills
- Adept at navigating through complex records and detailed information
- Maintaining high standards of trust, professionalism, and integrity
- Strong collaborative and networking skills
- High adaptability to work in stressful, fast-paced work situations
- Patience and empathy toward prospective and existing clients
- Ethical code of conduct and a calm demeanor
- Commitment to maintaining the standards of compliance and regulations
- Ability to work in a team environment or independently as required
- Keenness to learn about emerging tools, technologies, and developments
The role of a mortgage loan originator demands the best from professionals but in return, it also provides amazing growth opportunities and a rewarding career where you can work on your own terms.
If the job role, its career prospects, and the lucrative growth opportunities excite you and you have set your sights on exploring this career, continue reading to find the step-by-step process you need to follow.
The process to become a licensed MLO in the U.S.
To become a licensed mortgage loan originator in the United States, you need to obtain the NMLS MLO license.
Getting a license requires you to fulfill the qualifying education and licensing requirements established by the NMLS (Nationwide Mortgage Licensing System).
The NMLS is the de facto authority and the regulatory system that was established under the SAFE Act of 2008 to protect the rights and safeguard the interests of consumers.
The NMLS has set up minimum eligibility requirements that are applicable to all individuals across all states in the country. These are:
- You must be at least 18 years of age or older
- You must have a valid proof of being a legal resident or a lawfully admitted alien
- You must have a high school diploma or GED equivalent in education
- You must not have any history of a criminal record or felony in your name
As per the NMLS, all aspiring MLOs must complete 20 hours of mortgage licensing course and training to be eligible for applying for a license.
The curriculum consists of 8 hours of mandatory courses approved by the NMLS including:
- Federal laws and regulations (3 hours)
- Ethics, fair lending practices, fraud, and consumer rights protection (3 hours)
- Standards of non-traditional mortgage lending (2 hours)
The remaining 12 hours of course credits can be completed by choosing a suitable general elective course.
Keep in mind that different states might have their unique set of pre-licensing educational requirements in addition to the 20 hours of minimum education.
Thus, it is recommended that you check the state-specific MLO licensing requirements on the NMLS website to plan better.
The objective of pre-licensing education is to impart the knowledge of the principles, laws, and regulations of working in the mortgage lending industry.
After completing the education, you must take and pass the SAFE licensing exam in your state.
The SAFE (Secure and Fair Enforcement) for Mortgage Lending Act exam is a test designed to evaluate the knowledge and preparation of applicants regarding general industry terms, policies, and laws.
The exam consists of multiple-choice questions based on the topics covered during your mortgage loan originator course.
Passing the SAFE test requires you to score at least 75 percent or above and although the exam might seem challenging, it is certainly possible to pass the test on your first attempt.
After you have passed the SAFE MLO licensing exam in your state, you can apply for a loan originator license on the NMLS website.
You will have to input the proof of completion of your pre-licensing education along with proof of your passing score and an electronic scan of your fingerprints along with your application.
Additionally, you might be asked to submit the latest credit report along with your application to demonstrate your general financial fitness and responsibility.
Lastly, you must procure an employer sponsorship as many states require newly licensed MLOs to work under the supervision of senior, more experienced professionals.