Considering becoming a mortgage loan officer as a potential career path? Becoming a mortgage loan officer, also often referred to as MLO in the industry, can be a lucrative career choice with plenty of room for growth. Like any career, the goals, personal strengths, and skill set of a mortgage loan officer can be pretty specific, so it’s important to carefully consider all the different aspects before committing.
If you’re just starting to look into this career possibility, you probably have some questions, like “what is a mortgage loan officer”, “how much do mortgage loan officers make?”, and “is becoming a mortgage loan officer difficult?”.
In this guide, we’ll cover what the position is and how to become a mortgage loan officer, so you can decide if it’s the right move for you.
- What Is a Mortgage Loan Officer?
- How to Become a Mortgage Loan Officer?
- Other Tips for Those Considering Becoming a Mortgage Loan Officer
What Is a Mortgage Loan Officer?
A mortgage loan officer (MLO) is a professional who works for a bank or lender. Their job is to help prospective borrowers find and apply for a loan. The general overview of a mortgage loan officer’s job is to help potential borrowers figure out which loan options they are eligible for based on their specific circumstances. They will then forward the borrower’s information to the mortgage underwriter, who will review all financial information in order to determine whether they qualify for the home loan requested. Once approved, the mortgage loan officer will work with the borrower to complete the process.
When you go to a bank or a mortgage company (or contact them online), the mortgage loan officer is the person you would work with directly. They are more or less the main point of contact throughout the mortgage application process, from origination to approval and finalization.
Difference Between a Mortgage Loan Officer and Loan Originator
Loan originator is simply another name for a mortgage loan officer. Both titles can be shortened to the MLO acronym.
Difference Between a Mortgage Lender and a Mortgage Broker
A lender may hire mortgage loan originators or lend through mortgage brokers. A mortgage lender directly lends the funds and a mortgage broker arranges the loan and the lender they broker through lends the funds. As an MLO you could work for a lender or a broker depending which offer, programs and culture provide the best fit.
Difference Between a Mortgage Loan Officer and a Mortgage Underwriter
A mortgage underwriter is the individual who performs the actual analysis of the borrowers qualifications including their credit and debt-to-income ratio. Based on the type of loan they’re seeking and their personal financial profile, the underwriter determines the risk the borrower presents and whether they should be approved for the mortgage loan or not.
If you are considering becoming an underwriter, we offer FHA underwriter training, VA underwriter training, and USDA underwriter training—all of which can improve your team’s performance and expand their knowledge of different loan types. For mortgage loan officers that want to be experts and deliver more value to their clients and referral sources, underwriting training can be a competitive advantage.
How to Become a Mortgage Loan Officer
Not every position in the mortgage industry requires licensure, but MLOs do because they are directly discussing loan options and negotiating with the borrower. There are several key requirements mortgage loan originators must satisfy before they can begin working. For starters, to become a mortgage loan officer, you agree for regulators to view your credit and complete a criminal backgrounds check. This step and others ensure that MLOs show they are responsible financially.
You must also meet several requirements, including becoming registered with the Nationwide Multistate Licensing System and Registry (NMLS) and completing pre-licensing education and having at least a high school diploma or GED—although some employers require a bachelor’s degree in a finance- or business-related discipline.
To become a mortgage loan officer, you must complete the following steps:
- Register with the Nationwide Multistate Licensing System (NMLS) and Registry. You will create an account and receive an ID number.
- Take 20 hours of prelicensure education courses approved by NMLS.
- Pay for your exam.
- Pass the SAFE MLO Test with an exam score of 75% or better.
- Before taking the exam it is highly recommended that you learn about NMLS test difficulty and what to expect. Our Prep2Pass™ mobile app is designed to help you prepare for—and succeed at—the SAFE MLO Test.
- Apply for a license with the NMLS.
- Agree to a background check and credit report and provide fingerprints.
- Find a job. You must be associated with a lender before your NMLS license becomes active.
You will also need to renew your license every year in order to remain active. You may submit your renewal or your employer may sponsor your renewal, so make sure you have a clear understanding who is taking responsibility to ensure your license is renewed on time.
Keep in mind that licensing requirements may vary from state to state and your employer may have certain additional certifications or skills they prefer. Do you research before you begin the process, or at least when you start applying to ensure you are in the ideal position to secure a role as a mortgage loan officer at your lending institution of choice.
How Long Does It Take to Become an MLO?
Typically, once you start the process, it can take several weeks to a few months to complete the training requirements and prepare for the exam. Depending on whether you pass the exam the first time, your timeline may be longer. You must wait 30 days before retaking the SAFE MLO Test a second or third time. After the third time, you must wait 180 days to retake the exam.
Don’t waste your time and energy, use our Prep2Pass™ mobile app, which gives you access to flashcards, test style questions, training videos and unlimited attempts at simulating the SAFE MLO Test. That way, you can make sure you’re fully prepared the first time around. You can even email an instructor questions from the app.
Other Tips for Those Considering Becoming a Mortgage Loan Officer
If you’re still considering becoming a mortgage loan officer now that you know a bit more about what the job entails and the path to starting your career, we have a few other tips that could come in handy.
- People who are outgoing, detail oriented, and well-organized make for the best mortgage loan officers because this is a customer-facing role that requires sales finesse.
- If you’re not interested in learning more about the real estate industry, becoming a mortgage loan officer may not be the right career path for you.
- You should disclose any red flags that may appear on a background check. This could include anything from a criminal background to poor credit history—anything finance related will be of special interest to prospective employers.
- Learn as much about the industry as you can and take the time to thoroughly prepare for all examinations.
- Start creating relationships with local real estate agencies/agents, financial advisors and CPAs as early on in your career as possible. This will help you secure more client referrals.
Get Started with the MLO Process
There’s no time like the present to get your foot in the door in the mortgage industry. Now that you have a better idea of what to expect, you can start tackling the requirements you need to meet to become an MLO. Keep these tips in mind as you begin and succeed in your career as a mortgage loan officer.
