In the USA, the demand for Mortgage Loan Originators is growing rapidly and over the last few years, it has become a very hot career option. In order to become a mortgage loan originator, you have to complete 0 hours of pre-licensure education and pass the NMLS exam with a score of 75% or greater.
Moreover, you will need in-the-trenches experience to boost your career in this sector. What you can do is, find an experienced loan officer and take his mentorship. Many mortgage companies have training programs that will provide you with valuable practical experience and help you grow your career as a mortgage loan originator.
What is a Mortgage Loan Originator?
A mortgage Loan Originator shortly known as MLO is a person who helps borrowers find the best mortgage for their property. An MLO can be an individual or an entity and they are the original lender for the mortgage and complete the mortgage loan origination process. Some key duties of a mortgage loan originator are –
- Help the borrower contact the lender
- Help the borrower get preapproved for the loan
- Apply for a loan
- Negotiate the interest rate and other loan terms
- Close the loan deal, etc.
Requirements to Become a Mortgage Loan Originator
In order to become a mortgage loan originator, you have to fulfill some requirements. The first requirement is you must have at least a high school diploma or GED equivalent. But having a 4-year degree in finance or business will give you an upper hand in this sector. Moreover, many mortgage companies and banks offer various loan officer certification courses that you can participate in and complete.
Another key factor to becoming an MLO is you have to be licensed. You have to register with the Nationwide Mortgage Licensing System and Registry (NMLS) and take part in 20 hours of pre-licensure education courses and pass the examination with a score of 75% or greater to get the license. After passing the exam, you have to go through a criminal background check. Moreover, your credit report will be checked through the NMLS or another 3rd party company. This information proves your trustworthiness. Apart from that, there might be other state requirements that you have to fill to become a mortgage loan originator.
How Much Does a Mortgage Loan Originator Make?
The average salary of a mortgage loan originator in the United States is $81,598 but the salary range usually falls between $76,211 and $90,038. The salary range can vary depending on quite a few factors like education, certifications, marketing skills, sales skills, communication skills, years of experience, and many more. A survey from PayScale.com showed how “years of experience” plays a significant role in the salary of a mortgage loan originator –
- 0-5 years: $40,000
- 5-10 years: $70,000
- 10-20 years: $81,000
- 20+ years: $51,000
List of Highest Paying Cities for Mortgage Loan Originators in the United States
- Cleveland, OH
- $180,841 per year
- Jacksonville, FL
- $146,737 per year
- Phoenix, AZ
- $134,605 per year
- San Diego, CA
- $129,287 per year
- Atlanta, GA
- $116,616 per year
- Houston, TX
- $109,124 per year
- Detroit, MI
- $108,768 per year
- Scottsdale, AZ
- $97,605 per year
- Charlotte, NC
- $92,391 per year
FAQs about How to Gain Mortgage Loan Originator Experience
Why license is required to become a mortgage loan originator?
Since July 2008 the SAFE ACT (Secure and Fair Enforcement for Mortgage Licensing Act) is in effect and according to the SAFE Act, every mortgage loan originator needs to be licensed. The license is mandatory as it increases the trustworthiness of the loan originator. Moreover, according to the SAFE Act, the mortgage loan originator must have mortgage surety bond or recovery fund obligation coverage to reduce the fraud within the mortgage industry.
How long does it take to become a licensed Mortgage Loan Originator?
The answer to this question depends on quite a few things like your current experience level, are you licensed or not, etc. The most time you will need in the pre-licensure education requirements. You have to pass the examination and it can take weeks or even months. Moreover, if your exam score is under 75% then you have to wait 30 days before you can retake the exam. If you fail the exam 3 times then you will have to wait at least 180 days for your next attempt.
How much are mortgage origination fees?
Usually, the mortgage originator fees range from 0.5 percent to 1 percent of the total amount of the mortgage. This type of fee is charged by the mortgage lenders to cover the cost of various services like loan origination, processing, and underwriting. For example, if you qualify for a mortgage of $100,000 then you have to pay from $500 to $1,000 in mortgage origination fees.
Who makes the most money in the mortgage industry?
Below is a list of the highest-paying jobs in the mortgage industry:
- Escrow officer
- National average salary: $60,231 per year
- Senior loan processor
- National average salary: $60,862 per year
- National average salary: $61,119 per year
- Compliance officer
- National average salary: $61,306 per year
- Financial consultant
- National average salary: $67,541 per year
- Financial analyst
- National average salary: $67,756 per year
- Senior compliance officer
- National average salary: $68,535 per year
- What Can You Learn From The Bank Of America Financial Advisor Program?Financial advisor
- National average salary: $74,057 per year
- National average salary: $75,470 per year
- Regulatory specialist
- National average salary: $75,660 per year
What is the difference between a loan originator and a loan officer?
Though most people use the terms “mortgage loan originator (MLO)” and “loan officer (LO)” interchangeably but there is a slight distinction between the two. An MLO can be a person or an institute and work with you through the mortgage application process. On the other hand, a loan officer will only be a person who works with you. An MLO can fund your mortgage but a loan officer won’t be able to fund a mortgage.
Last Updated on August 7, 2022 by Ana S. Sutterfield
Magalie D. is a Diploma holder in Public Administration & Management from McGill University of Canada. She shares management tips here in MGTBlog when she has nothing to do and gets some free time after working in a multinational company at Toronto.