How to Become a Loan Broker

Learn how to become a loan broker. Research the job description and the education and licensing requirements and find out how to start a career in real estate finance.

Should I Become a Loan Broker?

Loan brokers and loan officers act as client representatives and advisers for real estate loan transactions. They work closely with banks to originate loans, qualify a client, recommend approvals, and facilitate the entire transaction process. Loan brokers mainly handle residential or commercial real estate loans, representing people or businesses.

Career Requirements

Degree Level No degree required; a bachelor's may help with professional advancement
Degree Field Business, economics, finance or related
Licensing Licensure required in all states
Experience Entry-level; some employers desire 3+ years of real estate lending experience or 4+ years in commercial lending
Key Skills Customer service skills, communication skills, salesmanship ability, leadership skills; accounting, document management, office suite and financial analysis software
Salary (2014) $62,620 per year (Median salary for loan officers)

Sources: U.S. Bureau of Labor Statistics (May 2014), O Net OnLine, Job postings by employers (October 2012)

Step 1: Earn a Bachelor's Degree

Although not formally required to become a loan broker or loan officer, earning a bachelor's degree might improve job prospects and salary negotiations. Completing the degree in a relevant field, such as finance, business or economics, can give an individual the financial background necessary to become a successful loan broker and display a candidate's dedication to prospective future employers. Once an individual has completed a 4-year bachelor's degree program, he or she can go on to take approved courses designed specifically for licensure.

Success Tips:

  • Develop excellent communication skills. Loan brokers and officers need excellent verbal and writing skills to communicate effectively with clients, coworkers and other business affiliates. A student enrolled in a bachelor's degree program can opt to take courses in communications, public speaking or writing to improve his or her communication abilities.
  • Gain work experience in the field. If a student plans to work while completing his or her undergraduate degree, getting a job in the financial services industry through internships or paid positions can help build field experience and assist with future career prospects. Working in related businesses might also help a student with networking opportunities.

Step 2: Complete a Loan Broker Training Course

Although states have varying requirements for loan broker licensure, federal law as of 2008 mandated the Mortgage Loan Originator (MLO) license for any residential loan broker or officer that provides client services. To earn the license, an individual needs to complete 20 hours of approved coursework that is usually offered online. Some typical areas of study include federal law, ethics and non-traditional mortgage lending. The course is designed to be completed in a short period of time, usually between three days to a week. Once the training is complete, a student is ready to get licensed.

  • Complete MLO license training during bachelor's program. A student may opt to complete the MLO license training while still enrolled in a 4-year bachelor's program to save time. For example, the 20 hours of training might be completed during a student's summer session to give him or her a head start.

Step 3: Get and Maintain MLO License

After completing the education necessary for licensure, the final step entails successfully passing a national exam. Some states may also require passing an additional state exam. Finally, a licensee must pass criminal background and credit history checks. Failing to meet these background requirements can delay or prevent an individual from getting the license.

The MLO license needs to be renewed every year, and many states require the completion of continuing education to qualify for license renewal. Continuing education typically involves revisiting topics in ethics, such as fair lending, consumer protection and fraud.

Step 4: Consider Voluntary Certification

After becoming formally licensed, a loan broker is eligible for voluntary certification. Certifications are offered through various non-profit organizations, including the American Bankers Association and the Mortgage Bankers Association. In general, eligibility requirements include completing an approved training program and may also require proof of at least two years of industry work experience and a professional reference letter. The final step for most certifications is to successfully pass an exam. Maintaining or renewing certifications can entail completing approved continuing education.

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