If you’re considering jumping into the mortgage business, you probably check have many questions about how to become a mortgage loan officer. So, read on for Jungo’s step-by-step guide on how to become a mortgage loan officer and join the industry that funds home buyer’s dreams.
What Does a Mortgage Loan Officer Do?
If you’ve gotten this far in your research, then you probably already know a little bit (or a lot!) about becoming a mortgage loan officer. However, to summarize, a loan officer (LO) evaluates a borrower’s loan application. They then work with both borrowers and lenders to determine what financing options are available to them.
In reality, however, an LO’s job includes much more than just that. Many mortgage loan officers are also in charge of their own lead generation or finding new potential borrowers. Additionally, mortgage loan officers are responsible for collecting and processing a borrower’s documents. They also ensure that the loan application is in compliance with state and federal requirements.
Being a loan officer also requires some serious creative thinking. For example, an LO may need to try to find an alternative option for a client. They may want to buy a house but do not have a high enough credit score to qualify. In these cases, and many others, an LO will often work closely with the borrower to come up with a plan to try to get financing.
Why Do We Need Loan Officers?
Buying a house is one of the biggest decisions that many people will make in their lives. Plus, the loan process can be very confusing. Because of both of these factors, it’s part of a loan officer’s job to be able to carefully and simply explain the loan process to their customers.
Ultimately, a mortgage loan officer makes it possible for a customer to borrow the money they need to purchase a home. This involves a lot of human interaction and detail-oriented, numbers-driven tasks, so great loan officers excel in these areas.
Is It Hard to Become a Mortgage Loan Officer?
How to become a mortgage loan officer isn’t as hard as you might think. While some procedures are stipulated by federal regulations under the Secure and Fair Enforcement Act for Mortgage Licensing of 2008 (SAFE Act), the exact process varies based on what state you live in and where you plan to work as a loan officer.
In general, the minimal essential requirements are to register with the National Mortgage Licensing System and Registry (NMLS), complete 20 hours of education, and pass the NMLS national exam. The current version of the test consists of 120 multiple-choice items covering five major areas corresponding to those covered in the 20-hour educational requirement:
- Mortgage loan origination activities (27%)
- Federal mortgage-related laws (24%)
- General mortgage knowledge (20%)
- Ethics (18%)
- Uniform state content (11%)
Each state also has specific requirements on how to become a mortgage loan officer, which inations and background tests. Altogether, completing these minimum requirements may take approximately 45 days, depending on your schedule, aptitude, and background.
Some mortgage loan officer positions require additional educational experience. A bachelor’s degree in a field such as finance or business is typical. If you already have such a degree, you’ll have a head start in this area.
If not, you may be able to gain some experience by passing the NMLS exam and taking a position which accepts that qualification, positioning you to apply for a better-paying opportunity later after you complete your degree. How long this process will take will depend on how much time you can commit to pursuing your degree.
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