Becoming a Loan Officer could prove to be one of the most lucrative decisions you make, but it is the right decision for you?
I will do my best to help you understand what it means and takes to becoming a loan officer and you can judge from there if its the right fit for you.
Types Of Loan Officer
In the mortgage world, there are different types of loan officers and they specialize in getting business in different ways.
- Refinance Loan Officer – These Loan Officers are typically dialing for dollars calling refinance trigger leads or leads from what seems like an endless supply of leads while interest rates are still low. These LO’s are typically making anywhere from 50 to 150 calls per day calling non exclusive leads that are also being called by 10 or more other LO’s, all of you competing to get the Pre-Approval. This can be a great way to start out as a new loan officer or a temporary revenue stream while you are building your purchase market funnel of referral partners. While many make a 6 figure income as a Refinance loan officer, your future earning is also pretty much capped and your career is reliant on interest rates being low enough to merit refinancing a mortgage. I’ve seen entire companies with 70 branch offices close over night because interest rates went up .5%.
- Purchase Loan Officer – These Loan Originators build their operation by calling and meeting referral partners such as real estate agents, divorce attorneys and financial planners to bring in new business. This is where the money is as there will always be people buying houses. As a purchase loan officer, your career isn’t as dependent on interest rate and unlike the one and done situation with a refinance lead, building a relationship with a quality real estate agent could yield 30 loans a year! Your goal here is to build your operation and a team of people working under you to close your loans while you are out meeting more referral partners to bring in business.
Loan Officer Job Description
As a loan officer it is your job to call upon and or generate business and close your loans. You need to learn all of the guidelines for loan programs such as FHA, VA, Conventional, 203k etc and any overlays your banks secondary market investors have. These investors are typically who you are pricing your loans with to establish interest rate. The better your buyers credit and financial situation the more investor options are available with better interest rates and less hoops to jump through to get your deal closed.
A loan officers job typically looks like this:
- Establish a new loan deal.
- Workup the customers 1003 to find the best loan program for them.
- Credit repair to either get a low credit borrower a deal or a better rate making it easier to close the deal.
- Processing the deal, ordering appraisals, underwriting stipulations, etc.
- Putting our fires and solving problems along the way
- Maintaining relationships with referral partners.
- Learning about new loan programs as they become available.
Loan Officer Salary
Loan officers can make anywhere between $50,000 a year to hundreds of thousands per year. There are many millionaire loan officers in the United States and yes, it’s even possible today but it takes planning, consistency and growth of your team. Many loan officers tend to get complacent around the $100k a year mark and just do what they have to to maintain that kind of income, though once you’re at that point, its much easier to double it.
Pay for Loan Officers varies by both the lender they work for, the LO’s monthly production and other factors. Some banks pay a salary and commission but the job is more about calling their leads or if you’re at a big box bank, you may get a salary and commission or even straight commission but you’ll likely hate your job. This is because your income will have a glass cieling of around $60,000 a year and you’ll spend the majority of your time fielding calls from angry customers wanting to know why its taking you 45+ days to close their loan. The upside is, you are regularly given deals y the bank to close that came from checking and savings account customers that didn’t know they should be using a private mortgage company. You’ll also find that you’re having to kick out a lot of loans because your bank has much more strict guidelines than most private mortgage companies. In a nutshell, this is the kind of job a brand new loan officer takes when they don’t know any better yet and OR because they couldn’t pass their NMLS test as these banks are FDIC banks that don’t require you to be licensed to work there.
If you want to make the most money you can make as a loan officer, you’ll want to find a private mortgage company paying 150 basis points or more per loan with the ability to close loans quickly, and build a team when you need to. The more investors the lender has, the more options you will have to get even more complicated loans closed quickly.
Want to know what the top Loan Officers in the country are doing? Check out this Top Loan Originator 200 List for 2016
Loan Officer Jobs
If if you’re still interest in becoming a loan officer and want to find a job, you can look at our loan officer job board or visit sites like Indeed.com and others.
Loan Officer Training
So, you still want to become a loan officer and need to pass your test? I have used NMLS exam study materials such as Training Pro and Abbacus and I found them both to be terrible. I’m not a great test taker and taking the NMLS exam is by far the hardest test I’ve ever taken. I originally used Compucram at the behest of my then branch manager who said getting 90’s in Compucram would mean passing the test. Wrong. I got a 56% my first time. Then I got an Abbacus sample test to study. Nope, got a 59%. It wasn’t until I raised hell and asked for real training materials that I was given a credit card and told to get what I wanted. I got Proschools. I printed out every module, read the entire thing straight through. I then read through it again and highlighted everything important. I finally read through it a 3rd time 2 days before I took my test. Woke up early on test day and ate a solid breakfast and reviewed…went to take my test, shaking the entire time and I passed with an 86%. I swear by Proschools and you’ll understand once you’ve read through it once and compared it to anything else you’ve studied with. Make sure to thank me in a comment here. 🙂