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How Loan Officers Get Paid

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How Are Mortgage Loan Officers Paid? (MORTGAGE BANKER Explains)

While technology has made financial services more efficient overall, mortgage banks in particular havent kept pace. What other reason could there be why so many lenders rely on physical paper and fax machines to share information?

Using antiquated tools is not only slow and annoying, its also a failure to use the best tools for the job. Making even a single loan involves handling huge amounts of data, performing complex calculations, and validating thousands of rules. Compared to human loan officers, computers are orders of magnitude faster, more accurate, and more efficient at doing these things.

A 2013 Oxford economic study of jobs susceptible to automation determined that the traditional role played by loan officers has a 98% likelihood of being replaced by computers.1

We dont fully agree that loan officer jobs should be automated. We believe:

  • Computer systems should do the calculations.
  • Borrowers should have direct, transparent access to these systems.
  • Human loan officers should be available to offer support and expert guidance to borrowers provided they arent being paid commission that skews their interests.

What Does A Loan Officer Do

A loan officer is the first point of contact for borrowers who want to apply for a loan from a bank, credit union or other lending institution. The loan officer will analyze and process loan applications for approval and originate the acceptance process. Also referred to as loan originators, these finance professionals work for financial institutions to find the best solution among a wide range of lending products for individuals and businesses.

In addition to reviewing eligibility for funding, a loan officer will also school applicants and borrowers on the details of borrowing money as well as provide consultation and support for questions relating to the process. The products they work with can include personal and business loans, lines of credit and mortgages.

As lending professionals, loan officers must be well-educated and trained in the various lending products offered, as well as have a fully comprehensive knowledge and understanding of regulatory guidelines for the banking industry, company policies and all required paperwork. These financial professionals must have at least a bachelor’s degree and are urged to obtain additional credentialing.

Related:Your Guide to Careers in Finance

What Are Top 10 Highest Paying Cities For Loan Officer Jobs

Weve identified 10 cities where the typical salary for a LOAN Officer job is above the national average. Topping the list is San Jose, CA, with Oakland, CA and Tanaina, AK close behind in the second and third positions. Tanaina, AK beats the national average by $13,397 , and San Jose, CA furthers that trend with another $14,688 above the $68,937 average.

Importantly, San Jose, CA has a moderately active LOAN Officer job market with only a few companies currently hiring for this type of role.

With these 10 cities having average salaries higher than the national average, the opportunities for economic advancement by changing locations as a LOAN Officer appears to be exceedingly fruitful.

Finally, another factor to consider is the average salary for these top ten cities varies very little at 4% between San Jose, CA and Concord, CA, reinforcing the limited potential for much wage advancement. The possibility of a lower cost of living may be the best factor to use when considering location and salary for a LOAN Officer role.


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Loan Officer Educational Requirements

  • Depending on where you work you may need to be licensed
  • It may easier to get started at a big bank than a smaller mortgage shop
  • Youll likely also have to pass a background check and get fingerprinted
  • And potentially complete continuing education

Interestingly, you can become a loan officer with no experience. Yep, its a potentially high-paying job that also welcomes newbies.

In fact, mortgage loan officers dont even need a bachelors degree, let alone a high school diploma to gain employment with certain brokers and mortgage lenders.

With the larger financial institutions, a college degree will likely be obligatory without notable sales experience.

In terms of licensing, it depends on the state, company, and specific position. These days, many loan officers need to be licensed, though there are still many positions at large retail banks that dont require an MLO license.

However, most MLOs need to be registered, perform a background check, and get fingerprinted. This is to protect the public from unscrupulous individuals working for mortgage companies.

If you do need to be licensed, its not the end of the world. In most cases, you simply need to take 20 hours of pre-licensure education, pass a test, and complete eight hours of continuing education annually.

The takeaway is that it might be easier to get a job at a retail bank, but these loan officers may be less knowledgeable as a result, and they could be lower paying jobs.

What Is A Loan Officer

How Do Myself &  Other Loan Officers Get Paid

A loan officer is an employee of a lender who helps borrowers apply for mortgages to buy or refinance their homes. In order to sell a home loan, a mortgage loan officer must be licensed. Loan officers help borrowers choose which mortgage product is best for their situations, but they may only sell the mortgage products offered by their lender. They generally receive a salary plus commission for the loans that they originate. However, some work on a commission-only basis.

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Communicates Well With Involved Parties

While a loan officer will advise you, crunch numbers and streamline your application process, their job involves a lot more than paperwork. A good loan officer will also communicate well with the other involved parties, such as the underwriter. Theyll act as your representative and stay in contact with everyone involved so you dont have to.

As such, you may want a loan officer who understands and connects with you. They should understand the needs and personalities of you and your family. If your loan officer understands what youre looking for, they can better help you find the best lending solutions.

How Much Do Mortgage Loan Officers Make

The average annual income for a mortgage loan officer in North Carolina is $75,570, according to the U.S. Bureau of Labor Statistics. However, keep in mind that there is a wide income range for MLOs. Top earners can bring in over $100,000 per year.

FREE GUIDE:Learn everything you need to know to start a successful career as a North Carolina mortgage loan officer.

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How Much Do Loan Officers Make

If you’ve got an interest in the world of finance and/or banking with customer service skills to match, becoming a loan officer may be a viable option for your next career move. This role is highly focused on sales goals as well as consultative relationships with business or individual customers, so if you’ve got a highly-attuned eye for detail, a desire to help others fulfill their dreams and want to make a great salary doing so, keep reading. In this article, we’ll discuss the job responsibilities of a loan officer as well as salary and commissions, along with a list of steps to follow to become a loan officer.

How To Reduce Monthly Mortgage Payments

How Loan Officers Make Money? Comp plans, BPS, rate sheets, and salaries?

Category: Loans 1. How to Lower Monthly Mortgage Payments Experian Aug 28, 2020 Lowering Your Monthly Mortgage Payment When You Buy Consider Refinancing Your Mortgage Remove Mortgage Insurance Payments Recast Your Aug 11, 2021 Refinance your mortgage to a lower rate · Refinance to a longer term

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How Can Loan Officers Use Tools Like Scoremaster To Close More Loans

Because most mortgage loan professionals work on commission, they might spend hours with prospective borrowers on loan scenarios. They also help borrowers improve credit scores, pull necessary documentation, assist in the completion of applications, order title reports, verify assets and undertake other activities.

Loan officers usually do not get paid if a prospective borrower decides not to buy or refinance, the application is denied, or the prospect changes lenders. Working for free is a big part of this business.

To help allay a borrowerâs fears of taking on the huge burden of a mortgage, loan officers can use a credit modeling tool like ScoreMaster to provide scenarios showing what the prospective borrowerâs total debt â and monthly payments â will look like. ScoreMaster can help the loan officer appear not as a commission-seeking salesperson but as a trusted personal finance advisor.


Possess Superior Customer Service Skills

One of the most important qualities for a loan officer to possess is superior customer service skills. Good loan officers strive to exceed customer expectations, provide advice and suggestions specific to a borrowers needs and to be accessible and responsive to the borrower and everyone else involved in the process.

A good loan officer aims to understand a borrowers needs so they can not only meet but exceed each clients expectations. A loan officer should also be easy to contact, and they should keep an open line of communication with you. This will allow them to assist you through every step of the loan application process.

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How Much Do Mortgage Loan Officers Make In North Carolina

Money is a powerful motivator, and its among the top reasons why many people choose to become a mortgage loan officer. If youre a North Carolinian whos interested in getting a mortgage loan officer license, youre probably wondering, How much do mortgage loan officers make in North Carolina? Heres some info to help answer that question and more.

Bank Loan Officer Salaries

How do Loan Officers Get Paid?

Anton Violin/Shutterstock

The loan officers working for larger, well-known banks are paid differently than those who work for smaller mortgage brokers or banks. These banks will pay a base salary to the loan officer and a bonus amount based on the total loan amount instead of the fees on a file.

Suppose a loan officer working for a large bank helps a consumer with their mortgage and the loan amount comes to $100,000. If the loan officer is paid 25 basis points , they would make 25 bps on $100,000, or $250.

Working with loan officers who work for a large bank has two advantages. The first is that they have a well-known name behind them. The second is that lenders of these loan officers are often times willing to originate a loan at a loss.

The disadvantage of working with loan officers who work for large banks is that they usually dont have much flexibility when it comes to rates and fees.

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Who Is The Highest

The highest-paid loan officers work for NEXA Mortgage and Geneva Financial. These mortgage loan officers make over $200,000 in a year.

However, the mean salary for loan officers is around $63,000 a year, and the actual amount a person will earn depends on their level of experience and ability.

For example, it is common for entry-level loan officers to make less than $50,000 in a year. Most entry-level loan officers’ salaries range between $35,000 to $45,000, with top earners making only $60,000 annually across the United States.

However, salaries can easily be in the five figures for seasoned loan officers skilled at closing on all types of loans.

The top locations for higher-level salaries for loan officers are in San Francisco, CA, Washington D.C., and Santa Clara, CA. Both San Francisco and Santa Clara beat the national average by about 16%, with an average salary of over $92,000, while Washington D.C. comes in with an average salary of just under $92,0000.

How Mortgage Loan Originators Are Compensated

Posted by ft Editorial Staff | Aug 28, 2018 | 0

Mortgage loan originators : how is your pay structured?

  • Commission-only
  • Salary, commissions, benefits and bonuses

Total Voters: 82

If you are beginning or transitioning into a career as a mortgage loan originator , your first question is likely: how will I earn an income?

first tuesday recently digested the laws for how MLOs may be paid. But, here in California, these laws translate into practice in a variety of ways.

Compensation structure may vary from office to office by commission or fee splits, salary, bonuses and benefits.

For example, large operations like banks that employ MLOs are more likely to offer base salaries and benefits. On the other hand, smaller, state-licensed mortgage brokerages are more likely to rely purely on commissions.

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How Do Mortgage Loan Officers Get Paid

Most MLOs in North Carolina are paid a base salary plus commission. The potential to earn sales commission on every loan that goes through is the reason why this occupation has a wide income rangeand high earning potential.

Commission rates will vary depending on the company you work for, so be sure to ask about commission during the interview process. If you work for a small shop, you might earn 1-2% of the loan amount, but you may not have much support in terms of bringing in deals and clients. If you work for a large bank, on the other hand, your commission might be much smaller, but youll likely enjoy a steady stream of clients.

Being A Loan Officer Can Be Really Lucrative

How Much Do Loan Officers REALLY Make?!
  • There are few jobs other than doctors, lawyers, and sports stars
  • That pay several hundred thousand dollars a year in salary
  • Top loan officers have the potential to make that kind of money too
  • And even average ones can make six-figures annually during good years

If a mortgage loan officer gets just one of those deals to go through, it often equates to a huge payday, sometimes as much as a few months salary working a minimum wage job or other lower paying jobs.

So thats the incentive, big money. But there are a number of questions you need to ask yourself before setting out in the mortgage industry as a loan officer.

First and foremost, it is not an easy job. Sure, a mortgage broker or bank may tell you that its simple. And yes, you may not have to work very hard in the traditional sense, or take part in any back-breaking work.

But factor in the stress, the near misses, lost deals, the shots to your ego, and the wheel-spinning and it isnt as effortless as they may make it out to be.

You will see deals fall through and you will waste a lot of time. You will have mental breakdowns as loans slip through your fingers, and brokers and real estate agents scream at you as deadlines close in.

You will undoubtedly make mistakes, which will require a phone call to the borrower to let them know you cant do the deal. It will be embarrassing and unpleasant.

All that aside, lets look at a loan officers typical day, not that any day is ever typical

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Make The Most Of Your Career

Olivier Le Moal/Shutterstock

Loan officers typically stay in just one place and dont advance within a company. Their status may be changed to Senior Loan Officer, but this doesnt mean anything. Rather, it just means they have been around for a long time.

Loan officers can, however, advance externally if another company recruits them at a higher commission or base salary. Those who are able to bring a large number of clients to the business may attract a lot of suitors and may even get a six-figure bonus offer to switch companies.

This means that there are several advancement opportunities for hard-working and successful loan officers.

Sales Experienceearn +1060% More

The jobs requiring this skill have decrease by 15.46% since 2018. Loan Officers with this skill earn +10.60% more than the average base salary, which is $179,928 per year.

Number of job openings on Indeed requiring this skill Change from previous year

More critical skills and qualifications that pay well

Also Check: How To Get A Loan Officer License In California

What Is A Mortgage Loan Officers Job Description

A day in the life of an MLO looks something like this:

  • Interviewing loan applicants and walking them through the terms and conditions of the loan
  • Assessing borrowers needs while taking into consideration their income, assets and credit to assess their creditworthiness
  • Collecting borrowers documentation like an appraisal report, credit report and reference check
  • Guiding them through the paperwork and preparing loan documents in compliance with industry standards
  • Facilitating the closing between the buyer, seller, real estate agent, escrow officer, etc.
  • Resolving issues in a timely manner

Because this job has a high satisfaction rate, Best Business Jobs ranks this profession at #8 in 2021, based on a range of factors like salary, future growth, job stress and work-life balance, to name a few.

The professional life of an MLO is pretty rewarding. Youll see a lot of interesting challenges come your way. As an MLO, youll enter the borrowers life at one of their biggest moments, and expertly guide them through it.

How To Be A Top Producing Loan Officer

How Do Loan Officers Get Paid?
  • Its simple really and theres no secret formula
  • Work hard and close as many loans as possible
  • You can accomplish this by solid networking and putting in the time
  • Theres nothing magical about it, just strong work ethic

While there might be gimmicks and top 10 lists and classes that teach you how to sell, it really comes down to hustling. Honestly.

If youre committed to the business, you can be really successful and earn a ton of money. When I worked for a wholesale lender, there were Account Executives who sat around and complained, and others who just put their heads down and dialed the phone.

That latter group made a lot of money, while the complainers made average salaries and eventually quit. Ultimately, its about work ethic and drive.

All the other stuff, like education and the art of selling, will come with experience. You cant teach someone how to sell in a class, nor can you teach them everything about mortgages in a day or a week.

It takes time and real-life experience to master those things. But without motivation and hard work, it will mean very little.

So if you want to be successful as a loan officer, you need to work hard and network. Dont be shy, make calls, visit real estate offices and link up with real estate brokers, and eventually it will get easier and easier.

Sure, you might have some nervous calls and meetings early on, but once you gain confidence, itll become second nature and pay dividends.

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