Loan Officer & Real Estate Agent Professional Tips

What is a Mortgage Loan Officer?
Loan officers, also frequently known as “Mortgage loan originators” or “MLOs”, are individuals employed by banks or mortgage companies to advise borrowers of the right loan for their situation. Some are self-employed versus being employed.

The Nationwide Mortgage Licensing System (NMLS), keeps track of loan officers as they must satisfy certain requirements to obtain an NMLS license. This license is required both nationally and at the state level. In order for a loan officer to originate loan they need either a federal license or a state license where they do business.

Mortgage Loan Officer vs. Mortgage Loan Broker
Sometimes a loan officer is confused with being a mortgage broker. The difference is a mortgage broker is necessary to broker the loan a typical bank with a few programs cannot do. In most cases, the mortgage broker gets a loan officer under their company to originate that loan.

Mortgage brokers and mortgage loan officers each must satisfactorily complete the same education requirements in order to obtain their license to originate loans in their state or additional states. The mortgage broker license usually costs more and there’s sometimes additional financial asset requirements to become a mortgage broker.

The following are 6 things we think makes the mortgage industry unique for anyone who is considering becoming a licensed rep.

1. Unlimited Income Potential

The mortgage industry is a go-getter type of job. A lot of mortgage professionals are paid on commission with an agreed percentage of each loan closed going towards the loan officer’s paycheck. What this means is the income potential for some loan officers is unlimited.

If you are self-driven and have good marketing and personable skills you may put yourself into a very successful position. Some LO’s work long hours while some who are more efficient work less and earn the same.

The typical commission for a loan officer ranges from 1.50 – 2.5% on each loan originated when working for mortgage company or net branch type set-up. Most keep their ceiling at 2% which is kind of the standard.

To show you what a typical commission is, let’s say that a loan officer closes oust one $450,000 loan this month.
$450,000 loan X 2% = $9,000 commission. If you have a commission split of 80%, your cut is $7,200 as a loan officer while the mortgage company, (usually broker) keeps the $1,800 for overhead.

If over a twelve month period, the MLO closed one loan each month, that loan officer will have made $86,400 for that year. Consider that this scenario assumes only one loan is closed per month. A lot of loan officers are able to originate 2-3 loans per month, with the top producers closing 8-10 loans a month, which is over 100 loans. Did you know that loan officers rank as #14 on its list of Best Business Jobs based on research from U.S. News?

This type of income and career has a label attached which is hard work. Closing home loans is not a job that is easy peasy. The lifestyle of a mortgage broker or loan originator is one that requires managing deadlines, effective communication skills, effective marketing campaigns, and self-motivated to succeed. In addition, the government regulations, rules and laws lace limits on how you do your in order to keep your MLO license.

2. Flexible Schedule and Lifestyle

One of the biggest benefits is how flexible being a loan officer is. As a mortgage broker or loan officer, loans can be originated from anywhere. All you need to have is a phone and a computer with a reliable internet connection. You could be located in California and originate a loan in North Carolina, or in New York originating a deal in Washington.

Even obtaining your state or federal license can be done pretty much wherever you are in the U.S. Of course to pass the exam choosing the right educator to get your license is important.

3. Quality Market Situation

Every industry experiences its ups and downs but those holding a mortgage license can always know they have something to offer and a business that is in demand. Every day another person is looking to purchase a home in your neighborhood and you could be the one to help them out!

Right now the industry has record low rates and they continue to fall. The below graph illustrates the trending decline in interest rates, which means more mortgages and refinances for you to originate for customers! It all depends on you and your willingness to take advantage of the opportunity.

4. A Continuous Stream of Incentives and Benefits

Because the demand for loan officers is growing, particularly with baby boomers exiting the job market, a large majority of mortgage companies are able to offer numerous perks and benefits to their loan officers that go over and above the typical origination fee. These incentives and benefits include things such as pay increases, sales bonuses, 401k, medical insurance, gym membership, gym membership, catered lunches, paid time-off, and company paid marketing campaigns.

To tell the truth, becoming a loan officer is absolutely rewarding, particularly in the improving economy. With the constant demand for loan officers, a growing number of mortgage companies will be extending their incentives and benefits in order to attract top talent.

5. Benefits of Networking

The mere thought of “networking” can cause many to become nervous and fearful. However networking doesn’t always mean wearing a suit, attending large industry events, and passing out tons of business cards to people you’ve just met. Simple by speaking with other loan officers, realtors, appraisers, and others that work closely with your industry is networking. That isn’t so hard is it?

Networking will grow your real estate knowledge and more knowledge means your clients will be better served by you. You will become a more successful loan originator and continue to build your business by using every one of these benefits.

Insider Tip: If you like big crowds, search for local industry events which can be great opportunities to make connections, arrange lunches with successful managers, and interact on real estate-specific blogs. Smaller scale: Make connections on social media with professionals and small businesses in your area with the goal of interacting with someone daily.

6. Help People Achieve Their Dream of Home-buying

Buying a home can be a really big deal for a first time home buyer. The financial commitment is usually the biggest purchase they will ever make. Many first-time home buyers become apprehensive and scared.

As a mortgage professional your job is help them understand their new house payment, how the process works, and to make it a simple transaction. Each loan originator has the opportunity to advise their borrower about the right loan so they have one less thing to worry about.

Becoming licensed in the mortgage industry is a unique and rewarding career which offers perks and potential not available elsewhere. It’s never too late to get started in an amazing career. So get started today!