Your practical guide to starting a career as a California mortgage broker
Do you wish to be a part of a career where you can enjoy numerous growth opportunities without having to slog extra and sacrifice work-life balance?
Is earning a six-figure annual income on your wish list and do you dream of being your own boss?
If the answer is affirmative, then working in the mortgage lending industry might just be the perfect career for you.
Mortgage loan officers (MLOs) in California enjoy a high median salary of $73K annually and the more skilled and experienced ones can earn as much as $190K in a year.
On top of it, the average commission for a California loan officer is between $10K and $30K in a year.
Plus, there are exciting job perks such as the ability to work in a hybrid or remote setup and even the flexibility to set up your own working hours.
The job prospects for mortgage loan officers are steady and bright, especially as the overall job outlook is expected to grow by around 7 percent by 2029 as per the U.S. Bureau of Labor Statistics (BLS).
If you are looking for a financially rewarding and exciting career with a mix of challenges and opportunities for growth, now is a good time to enter the mortgage lending industry in CA.
However, to achieve this professional goal and start working with clients, you must first meet pre-established set of education, training, and licensing requirements.
Starting a new career can be daunting and we understand that it can feel overwhelming for many, especially if you are going to start working for the first time.
To make things easier for you, we have put together this simplified guide which covers all the key aspects of becoming a licensed mortgage loan officer.
If you are curious about knowing more about how to become a mortgage loan officer in California and considering a career as one, this guide will answer all your questions.
From education and qualifying requirements to the ideal skills and job responsibilities, we will dive deep into starting a career as a mortgage loan officer and being part of a dynamic, challenging, and prosperous industry.
Who is a mortgage loan officer
When people think of homeownership, they think of getting a mortgage to offset the high-ticket purchase into smaller, more affordable costs.
Buying a home is a huge financial and emotional commitment for many homebuyers, especially the ones who are buying a property for the first time.
What makes the purchase more cumbersome is the sheer number of paperwork, documentation, and financial acumen required.
This is where a mortgage loan officer or broker comes into the picture. As mortgage loan officers (MLOs), you will be responsible for working with your clients through the various stages of getting a mortgage.
Be it learning about the various types of mortgages available in the market or choosing the right refinancing plan, homebuyers rely on the expertise and guidance of loan officers and brokers to make financial decisions.
As a loan officer, you will serve as the single point of contact for borrowers across different stages of the loan process.
A loan officer’s key job responsibility is to assess the loan eligibility of a borrower based on their income, financial status, credit liabilities, and other qualifying factors.
Based on their client’s needs, requirements, and goals, a loan officer can recommend the most suitable and feasible loan type and payment terms.
Loan officers are employed by banks, credit unions, and private lenders who entrust the professional skills of loan officers to help disburse mortgage loans to borrowers.
Before we give you a detailed breakdown of the steps required to obtain a mortgage loan broker license in California, it is important to learn about the duties you will perform in this role.
The duties of a mortgage loan officer
Mortgage loan officers are expected to perform a wide range of tasks and activities as part of their job profile.
From administration and documentation to customer service and networking, a day in the life of a loan officer is rarely dull or boring.
If you are curious to learn more about the types of duties you will perform, here’s a list.
- Meet with potential clients to understand their needs, requirements, and objectives for applying for a loan.
- Interact and interview individuals who are seeking a mortgage and evaluate their creditworthiness based on their income, employment, tax returns, and credit reports.
- Collect all the personal and financial documentation required for submitting the loan application in a proper way.
- Analyze and vet the financial and personal information provided by borrowers to get an accurate assessment of an individual’s financial status and potential risks.
- Educate clients about the various types of loan products, plans, payment terms, interest rates, and other fees as part of the loan structuring process.
- Guide clients in understanding the various risks associated with choosing a specific mortgage plan including its pros and cons.
- Assist clients in choosing the most suitable and feasible mortgage plan to meet their needs and financial health.
- Guide borrowers in completing the loan paperwork and filling out the loan application.
- Work with underwriters, mortgage brokers, and loan originators to facilitate the loan application process and negotiate the loan terms on behalf of clients.
- Maintain compliance with the state and federal rules, regulations, and guidelines for mortgage loans.
- Provide timely updates and conduct periodic check-ins during and after cloning the loan application.
- Resolve any queries or concerns posted by clients and help mitigate any challenges faced by borrowers.
Mortgage loan officers are employed by both state and privately owned or operated financial institutions to manage the lending process.
While your exact day-to-day responsibilities might vary depending on your employer’s discretion, you will always be expected to play a crucial role in facilitating loans and acting as a bridge between lenders and borrowers.
Since you will be dealing with financial and personal information, it is important that you acquire an adequate level of education, skills, and training to do your best job as a loan officer.
By completing the California mortgage license requirements and meeting all the state and federal guidelines, you will be able to set yourself up for a successful and rewarding career.
What are the California MLO licensing requirements
When it comes to the mortgage and lending industry, many individuals often get confused about whether to choose the path of a mortgage broker or a mortgage loan officer.
Although these two are specific job profiles with unique objectives, they both share many common job responsibilities, tasks, and duties.
If you are wondering how to become a mortgage broker in California or become a loan officer, you will have to fulfill a similar set of formal education and licensing requirements.
Let’s take a step-by-step look at what exactly you need to do to enter the mortgage lending and finance industry in California.
Step 1: Meet the eligibility requirements
The absolute minimum eligibility requirements to qualify for a job in the mortgage lending industry are being 18 years of age or older and having a valid social security number with legal proof of residency.
If you are unable to meet the above statutory requirements, you will be deemed unfit for applying for this job role.
Step 2: Fulfill the basic education requirements
If you want to be eligible for a license, you must have a high school diploma in education or a GED equivalent.
Some employers strongly prefer candidates with a bachelor’s degree in finance, accounting, risk management, or business administration.
In many cases, career-specific courses about financial accounting, lending, economics, business, and advanced mathematics are also useful for aspiring loan officers.
Step 3: Complete pre-licensing education
Before you start working as a mortgage loan officer in California, you must equip yourself with industry-specific education, knowledge, and training.
As a loan officer, you will be dealing with financial data, personal information, and accounts all day long.
To ensure you are aware of the industry laws, regulations, and guidelines, it is important that you equip yourself with the necessary education.
In California, aspiring loan officers are required to complete 20 hours of NMLS-approved pre-licensing education. Below are some of the course topics and subjects you will cover:
- Federal Law (3 hours)
- Non-Traditional Mortgage Lending (2 hours)
- Ethics, Fair Trade, and Consumer Protection (3 hours)
- General electives (12 hours)
Some states require additional state-specific course credits to be completed, however, there is no such mandatory requirement in California.
It is recommended that you refer to the official pre-licensing education requirements by visiting the California DRE (Department of Real Estate) website.
Step 4: Register with the NMLS
The NMLS (Nationwide Multistate Licensing System) is the centralized authority and regulatory body that oversees regulating and issuing licenses to mortgage lending companies and professionals.
Like most states, California also requires aspiring MLOs to register with the NMLS and follow the guidelines established by the licensing agency.
To do so, you need to visit the NMLS website and provide the required details to register. Once you register successfully, you will receive your unique NMLS identification number.
Step 5: Take the SAFE MLO licensing test
To earn your MLO license, you must prove your aptitude and skills by passing the SAFE (Secure and Fair Enforcement) licensing test in California.
The test consists of 125 multiple-choice questions and you must score at least 75 percent or above to pass the test.
You will get a total of 190 minutes to attempt the exam and complete all the questions. If you are unable to clear the test on your first attempt, you can reschedule it again by paying the exam fee of $110.
Step 6: Clear the background check and verification
If you have made it this far, congratulations as you’re now just a step or two away from becoming a licensed mortgage loan officer in CA!
The next step in your licensing journey is to complete the mandatory background verification and criminal history check as required by the SAFE Act.
Completing verification is mandatory and you must prove you meet the standards for honesty, integrity, and trustworthiness to be a part of a heavily regulated industry.
To do so, you must submit your updated fingerprint records via a live scan and submit the prints on the NMLS website. Additionally, you must also submit an updated credit report.
In California, you are required to have a certain minimum score in order to be approved to be licensed as an MLO.
Step 7: Find employer sponsorship
So, you’ve made it this far and got your licensing application reviewed and approved by the California State Licensing Authority.
As the last step, you must be sponsored by a state-based and licensed firm or employer.
California’s regulatory authority has made it mandatory for all newly licensed MLOs to work under the supervision of more experienced and senior employers.