Become a Loan Originator: Education and Career Roadmap

Learn how to become a loan originator. Explore the job description and licensing requirements, and find out how to start a career in mortgage loan origination. View article »

  • 0:01 Loan Originators
  • 1:20 Step 1: Bachelor's Degree
  • 1:38 Step 2: License
  • 2:52 Step 3: Continuing Education
  • 3:11 Step 4: Certification
  • 3:49 Step 5: Professional…

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Video Transcript

Loan Originators

Loan originators meet with clients who are interested in obtaining mortgages to evaluate and discuss financing options. They respond to loan inquiries, research loan options for customers, accept completed applications, answer questions, and gather all necessary documentation. They often negotiate the terms and conditions of loans between clients and lending institutions. Most loan originators are employed by financial institutions, such as credit unions, banks, and mortgage companies, though they can also be independent contractors. Travel to clients' homes or businesses might be required and could take place on weekends or evenings to meet scheduling needs.

Degree Level No degree required; bachelor's degree helpful
Degree Field Finance, business, economics, or a related field
Experience 1-5 years of experience needed, depending on the employer
Licensure and Certification Licensure is required in every state for mortgage loan officers; voluntary certifications are available; some employers assist candidates with test preparation or pay for them to take the licensure exam.
Key Skills Communication, decision-making, interpersonal, and organizational skills; the ability to multi-task and take the initiative
Salary $44,210 per year (Median salary from October 2016 for loan originators)

Sources: U.S. Bureau of Labor Statistics, Payscale.com, Online job postings (December 2012)

Step 1: Bachelor's Degree

While not a strict requirement for loan originators, having a bachelor's degree may bring more job opportunities. Bachelor's degree programs in business, finance, economics, or a similar field may help prepare individuals for this career and include courses in math and accounting.

Step 2: License

Mortgage loan officers in all states must have a license. Some employers assist candidates with test preparation or pay for them to take the licensing exam. To obtain a state license, loan originators must pass both the national and state components of the SAFE Mortgage Loan Originator Test, administered by the Nationwide Mortgage Licensing System and Registry (NMLS). According to the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (SAFE Act), candidates for licensure must complete pre-licensure education in ethics, federal regulations, nontraditional mortgage lending, and mortgage origination. Courses must be approved by the NMLS. Each state mandates the amount of course hours needed. Although most states require 20 hours, several states require more, including Nevada, North Carolina, Ohio, and West Virginia.

Most states also require candidates for licensure to be sponsored by a licensed mortgage broker, consumer finance company, or banker before taking the exam or within a specified period of time afterwards.

Step 3: Continuing Education

To maintain licensure, loan originators must complete a minimum of 8 hours of NMLS-approved education every year; some states require more. Individuals who are unable to complete the required continuing education on time may be able to take late courses.

Step 4: Certification

Certification is not a requirement for loan originators, but it can demonstrate professional expertise in the field and may lead to more job opportunities. Voluntary certification is available through the Mortgage Bankers Association. Available certifications include Certified Mortgage Banker (CMB), Commercial Certified Mortgage Servicer (CMS), Residential Certified Mortgage Servicer (CMS), Certified Residential Underwriter (CU), and Accredited Mortgage Professional (AMP).

Step 5: Professional Membership

Aspiring loan originators may consider joining an industry-related organization, such as the Mortgage Bankers Association. Members have access to continuing education, professional training, networking opportunities, industry-related events, and other resources for professional growth and advancement.

Remember, although loan originators don't always need a bachelor's degree or professional certification, all states require mortgage loan officers to have a license. As of October 2016, the median annual salary for a loan originator was $44,210.


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