How To Become Loan Originator

You can become a loan originator by:

• Getting your license. To do this, you’ll need to pass the National Mortgage Licensing System and Registry (NMLS) test and register with NMLS. To find out more about how to get your license, visit the NMLS website at www.nmlscredentialing.org.
• Getting a job in real estate. Becoming a loan officer will give you valuable experience in the industry, which can help you decide if becoming a loan originator is right for you.

How To Become Loan Originator

A loan officer helps people borrow money from a bank or credit union to buy houses, invest in their businesses, or achieve other goals. Learn about loan officer skills, salary, qualifications and what it takes to become one.

Loans can be pivotal for families wanting to buy their first homes, students trying to attend college, or small business owners hoping to expand their businesses. A loan officer acts as a mediator between those people and the financial institution that can provide them the means to achieve their goals.

What is a loan officer?

A loan officer is a finance professional who helps individuals, small businesses, and companies borrow money to accomplish goals like buying a house or getting new equipment to grow a business. A loan officer can counsel potential borrowers through the loan process, educating a borrower on loans and their terms.

Loan officers can help individuals and companies borrow money by administering the following types of loans:

• Mortgage loans
• Educational loans
• Small business loans
• Automobile loans

What does a loan officer do?

A loan officer’s general tasks and responsibilities include evaluating, authorizing, and recommending loan applications of potential borrowers. Loan officers can work in financial institutions such as banks, credit unions, or mortgage companies.

Specific tasks might include:

• Receiving and assessing loan applications
• Assessing borrowers’ creditworthiness by analyzing their financial history (a process called underwriting)
• Consulting and educating borrowers on loan terms
• Answering borrowers’ questions and providing customer service

How much do loan officers make?

The median annual salary for a loan officer is $63,960 in the United States, according to the US Bureau of Labor Statistics [1]. Your salary could be higher or lower depending on your company and the geographical area you’re working in.

Loan officer: Job outlook

The job outlook for loan officers is projected to grow 1 percent between 2020 and 2030, according to the BLS. The demand for loan officers increases when the economy grows and remains healthy.

Depending on the company’s salary structure, a loan officer may receive a commission or bonus on the loans they originate.

How to become a loan officer

Though you’ll likely learn many aspects of being a loan officer on the job, hiring managers may look for certain qualities in potential employees. Here are some common requirements.

Loan officer qualifications

Licensing: Licensing requirements to become a loan officer can vary from state to state. Loan officers who wish to work with mortgages however must meet federal guidelines. This will require loan officers to get Mortgage Loan Originator (MLO) licenses from their state, and register with the National Mortgage Licensing Service (NMLS). Obtaining a license might require coursework, passing an exam, and passing a background and credit check.

Education: Though there’s no strict educational requirement, many financial institutions will look for job candidates that have at least a bachelor’s degree. A college degree in finance, economics, or a field related to banking can give you the background knowledge desirable in a loan officer.

Loan officer skills

You’ll want to have the following skills to work as a loan officer:

Analytical skills will help a loan officer assess a potential borrower’s financial statements and creditworthiness. Being able to understand how financial markets work will also come in handy.

Interpersonal skills help a loan officer work with customers during the loan process. A loan officer should be able to communicate well with potential borrowers to determine their financial needs and answer questions that they might have.

Time management and organizational skills are important for loan officers because of the detailed paperwork necessary for each loan.

Computer skills are important as a loan officer often uses specialized banking and financial software applications to help service a loan. A loan officer might also need computer skills to adapt to new digital services and platforms.