By
Knowledge Coop
Curious about becoming a mortgage loan officer? Known in the mortgage industry as mortgage loan originators (MLOs), these professionals are essential in guiding homebuyers through one of the biggest financial decisions of their lives. As the primary point of contact during a mortgage transaction, MLOs help buyers secure home loans that fit their budget and set them up for long-term success in their dream homes. If you're passionate about helping people achieve homeownership, this career might be the perfect fit for you.
MLOs wear many hats, guiding borrowers through the loan process while playing a critical role in the real estate ecosystem. Their responsibilities include:
Beyond supporting individual homebuyers, MLOs play a vital role in ensuring a stable and trustworthy real estate market. By promoting responsible lending practices, they help reduce instances of mortgage fraud and foreclosures. Exceptional MLOs act as a first line of defense, fostering trust in the home-buying process and contributing to a thriving housing market.
Many people are drawn to this career path, and for good reason—mortgage loan officers were ranked #2 on Indeed's list of the best jobs in 2024! With an average yearly salary of $182,310 this year, the role offers strong earning potential without requiring a graduate-level education. It's a promising career choice for those looking to make an impact in the housing market while achieving financial success.
If you want to become a mortgage loan officer, you probably have a number of questions about the position. Let's review everything you need to consider before you close your first loan.
Success as an MLO starts with the right personality traits. Here are a few qualities that can set you apart in this field:
If you're detail-oriented, personable, and eager to keep learning, a career as a loan officer might be an excellent match for you.
As an MLO, you'll handle sensitive financial information and serve as a bridge between borrowers and lenders. Because of the responsibility you hold, financial integrity and a clean criminal record are non-negotiable.
Mortgage loan originators must meet strict financial and character requirements to ensure the industry remains trustworthy and secure. This commitment to high standards helps prevent the kinds of issues that contributed to the 2008 financial crisis.
Here are some common reasons an NMLS licensing application may be denied:
It is always best to disclose as much as possible on your application. In some instances, regulators will accept an applicant even though they have potential red flags. For instance, many states provide legal exceptions for applicants with unpaid medical debt, and a criminal conviction unrelated to fraud—such as a DUI—may not automatically lead to licensure rejection.
By now, you might be wondering: how long does it take to become a loan officer? The answer depends on your approach, but one thing is clear—once you invest time and money into the process, you'll want to see it through. That's why doing your research before diving into pre-licensure courses is essential.
The National Mortgage Licensing System (NMLS), the main regulatory body for MLOs, provides a wealth of valuable resources, including state-specific licensure requirements. At Knowledge Coop, we offer even more support—from Online CE and In Person CE courses to a community of professionals ready to answer your questions, along with a comprehensive list of resources for aspiring MLOs. Understanding the steps to become a mortgage loan originator upfront will help you feel confident as you begin your training.
One piece of good news? You don't need a specific degree to break into this field. While many MLOs have business, banking, economics, or finance backgrounds, it's not a requirement. Instead, becoming an MLO involves completing pre-licensure education courses, passing an exam, and submitting your information for approval by the NMLS.
So, you've decided that a career in mortgage loan origination is the right path for you. What comes next? The first and most important step is obtaining a valid mortgage origination license. It is illegal to practice as an MLO without a state-issued license.
One thing to remember is that each state has specific guidelines for MLO licensure, and state agencies are the ones who issue licenses. However, some requirements listed in federal legislation are applicable across the board. It is worthwhile to become familiar with the federal Secure and Fair Enforcement Act for Mortgage Licensing (SAFE ACT) of 2008, a major bill passed by Congress in the wake of the mortgage lending crisis.
Below is a step-by-step guide to getting your NMLS License:
Your journey begins by requesting an account with the Nationwide Mortgage Licensing System (NMLS)—because who doesn't love paperwork? Follow these steps to do so.
Now, onto the world of mortgage education! Every state requires you to complete 20 hours of NMLS-approved mortgage education. Grab some snacks because the NMLS SAFE Mortgage Pre-License Training includes:
In addition to the 20-hour SAFE course, you may be required to take state-specific pre-licensure education (PE). For the most up-to-date requirements, refer to your respective states' guidelines and visit the Knowledge Coop when you're ready to purchase your federal and state PE!
Congratulations on surviving the education marathon! Now, it's time for the NMLS Mortgage Licensing Exam, also known as the SAFE MLO Test. Here's the process to schedule your test. Under SAFE Act requirements, a waiting period is required between attempts to retake the SAFE MLO Test. After the first and second failed attempts, applicants must wait 30 days before retaking the test. If an individual fails three times, a 180-day waiting period applies before they can test again.
If you've made it this far, you deserve a medal! Now that you've passed your federal and state testing, you can apply for your mortgage loan originator license on the NMLS website. Here's a step-by-step guide.
Time to finalize your application. You'll need to enter 10 years of residential and employment history with no gaps, agree to request a Federal Background Check and Credit Report, and pay all processing fees.
You've made it to the final step! The last to do is to have your NMLS ID sponsored by a state-licensed employer. Submit your sponsorship through your NMLS ID, and once it's linked, you're ready to take on the world as a fully licensed MLO.
Congrats—you're officially licensed! Now it's time to launch your loan officer career. While some MLOs choose to fly solo, most newbies start with an established company, like a bank, credit union, or mortgage lending institution. Starting with an experienced team gives you access to a ready-made client base, valuable mentorship, and the chance to learn the ropes in a supportive environment.
But don't let all the paperwork and bureaucracy make you forget why you got into this career in the first place: helping people achieve their dream of homeownership! Buying a home can feel like navigating a maze for most people, and you're the expert who makes it easier. With your guidance, clients can secure the best possible loan and move into a home they'll love.
Of course, the learning doesn't stop here. Staying licensed and sharp in this industry means keeping up with education and the ever-changing world of mortgage lending. Let's break it down.
Earning your license is just the beginning—you'll need to stay on top of a few things to keep it active:
The good news? The NMLS website has a ton of tools to help you out, including renewal checklists and fee guides.
The mortgage world doesn't stand still, and neither should you! To renew your license, you'll need to complete eight hours of continuing education every year. Here's what's on the syllabus:
Consider it your annual refresher to stay sharp and ahead of the game. And remember: skipping these classes could mean losing your license—no one wants that! The Knowledge Coop offers multiple ways to take your mortgage continuing education online and in person!
Life happens, and when it does, you'll need to keep your NMLS records in check. Here are a few situations where you'll need to sound the alarm:
Keeping your records current keeps you compliant and helps maintain your reputation as a trusted professional.
Still deciding if a career as a mortgage loan originator is your perfect fit? Let us help you get there! Join our mailing list below for expert tips, insider resources, and everything you need to kickstart your journey as a loan officer.
