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How Much Do Commercial Loan Officers Make

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How Much Tax Will You Have To Pay As A Commercial Loan Officer

Loan Officer Salary: How Much Does a Loan Officer Make?

For an individual filer in this tax bracket, you would have an estimated average federal tax in 2018 of 22%. After a federal tax rate of 22% has been taken out, Commercial Loan Officers could expect to have a take-home pay of $56,864/year, with each paycheck equaling approximately $2,369*.

* assuming bi-monthly pay period. Taxes estimated using tax rates for a single filer using 2018 federal and state tax tables. Metro-specific taxes are not considered in calculations. This data is intended to be an estimate, not prescriptive financial or tax advice.

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.

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What Skills Do Loan Officers Need

Not everyone is cut out for a career as a loan officer. These professionals are tasked with making tough decisions and staying on top of several applications and client situations at once. With that in mind, the following soft skills will set most loan officers up for success:

  • : Loan officers cant depend on the output of underwriting software and must consider what outside elements impact a clients ability to pay the loan.
  • An eye for detail: Each piece of information on an application can have a huge effect on the probability of the loan.
  • Initiative: Since many loan officers are paid a commission, the more they can seek out new clients and promote the institution, the more successful both the loan officers and their company will be.
  • Interpersonal Skills: Clients must have complete trust and confidence in their loan officer, believing that they are guiding them toward the best loan option to fit their lives and financial situation.

Jeff Hensel, a loan officer at North Coast Financial, emphasizes the relational aspect of being a loan officer and the importance of earning your clients trust. Home-buyers can often be anxious. At times, being a loan officer can feel like being a therapist, he says. Clients often need to be reassured that everything is going smoothly and their loan will close in time.

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What Do Loan Officers Do

In sum, a loan officers job is to Minimize risk and maximize profits, according to Skylar Wallace, CEO of Lendly. Loan officers are required to wear at least two different hats. First, a loan officer often works as a sort of salesperson to convince an individual or business that their bank or financial institution offers the best borrowing option. This can include the following:

  • Contacting companies or individuals to ask if they need a loan
  • Meeting with loan applicants to discuss ambitions and loan options
  • Spelling out various types of loans and terms to the client

Once the business or individual is on board, the loan officer shifts from acting as a salesperson to being a loan approval chaperon. This can consist of the following elements:

  • Gathering and verifying personal and financial information
  • Inputting information into underwriting software, which produces a loan application recommendation based on the applicants creditworthiness and risk
  • Considering underwriting output and any additional information to arrive at a decision
  • Working with a third party, like a notary, to close the loan

The ability to perform several functions allows future loan officers the opportunity to utilize previous customer service or sales experience while also learning new software and technical skills. Keep in mind, however, that larger banks sometimes separate these roles into unique positions.

What Does A Loan Officer Do On A Daily Basis

How Much Do Loan Officers Make?
  • Selling is the main focus of a loan officer
  • That means bringing in new customers to apply for home loans
  • Whether its a refinance loan or a purchase loan
  • So you can earn a commission when it eventually funds

The broker or bank, or whomever employs the loan officer, may provide sales leads to the loan officer, or they may be completely on their own when it comes to acquiring business, making up their own sales and marketing to pitch potential borrowers.

If you work at a large bank or call center, you may be fortunate enough to just take incoming phone calls.

That means youll sit in a cubicle all day and field phone calls. You could also be required to follow-up with customers who expressed interest.

The good part is that you wont have to find prospects on your own. That can be the hardest part.

If you work for a broker or a small company, you may still be provided with leads, though the quality could be less than desirable. That means you will have to network, make contacts, and market yourself and your services.

This entails trying to get individuals to finance home purchases or refinance their existing mortgages. Thats it. When that happens, you generally get paid.

Often, loan officers will implicitly or explicitly partner with a real estate agent or office so they can provide financing to their home buying prospects.

If youve ever purchased a home, youve likely had the preferred lenders contact info thrown your way when it comes time to fill out a loan application.

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What Is A Loan Officer

A loan officer is someone who has extensive knowledge of the various types of loans that a financial institution can provide, as well as a complete working knowledge of the requirements or conditions that are necessary for applicants to successfully qualify for each type of loan.

Loan officers can specialize in consumer, mortgage or commercial loans and often work for commercial banks, mortgage companies or credit unions. They act as the liaison between the institution and the applicant, and will seek to find a loan arrangement that is in the best interests of both parties.

Final Word On Loan Officers

To sum it up, loan officers have the potential to make more money than the majority of the population, including doctors and lawyers.

And even pro athletes if their careers are long enough, but financial situations will vary greatly based on sales performance.

The amount of time and work you put in is paramount, and you must be very driven to excel in the mortgage industry. It can be a very cut-throat field, filled with stress, deadlines, and missed opportunities.

After all, were talking about a lot of money and big life moments for the families taking out these loans. So its not to be taken lightly.

The job certainly isnt for everyone, but if you think youve got what it takes, it can be very fruitful and lead to other opportunities, such as being a broker, working with a large banking institution, or working in commercial real estate, just to name a few.

Always do plenty of research about the mortgage company or broker you decide to work for to ensure you know exactly how and what you will be paid, and what is expected of you. Good luck out there!

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Education Of A Commercial Loan Officer

A bachelors degree is basic to becoming a commercial loan officer, and a specialty in corporate analysis, accounting, finance, business and economics is a valuable background. As you move through the tiers of the industry, further education is warranted. You also need to be certified by the Independent Community Banks of America and/or the American Banking Association .

It also helps to be a licensed mortgage loan officer as many businesses need guidance with securing commercial properties. Continuing education is also offered by individual banking institutions, as well as the ICBA and ABA. Certificates in small business lending and agricultural lending also lend importance to an applicants resume, as well as understanding the local economy and the industries that support it.

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How Much Do Loan Officers REALLY Make?!

Recently, we received insight into the process that SBA loan officers use to determine whether or not to approve or deny EIDL loans, in particular EIDL loans over $500K. Previously, the SBA stated that the total amount businesses could qualify for was based on their 2019 revenue and the cost of goods sold , but now we have more insight into the decision-making process. Here’s what you need to know.

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Loan Officer Job Prospects

Because many different industries need loan officers, from real estate to banking, jobs are often available. However, according to the U.S. Bureau of Labor Statistics, the job market for loan officers will hold steady in the decade between 2020 to 2030. The BLS reports that approximately 25,000 openings for loan officers are projected each year, on average, over the decade.

These jobs will most likely occur because many loan officers may hit retirement age or leave the labor force for other reasons.

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Where Do Loan Officers Work

Loan officers are typically employed by commercial banks, credit unions, mortgage companies and other financial institutions. Most work full time or more, depending on their workload and employer.

Though many loan officers work in local branches, Wallace says more and more banks are consolidating and have transitioned to a centralized underwriting team that approves all loans bank-wide, leaving the local office staff to just take applications.

But its also true that working at a local branch can have its own advantages. Since the loan officer position is relationship-based, Wallace notes these professionals often make connections by serving in their communitiescoaching little league teams, attending parades and high school football games or joining the local chamber of commerce.

Local loan officers who are established in their communities will receive informal inquiries at all times of the dayWallace says the best performing lenders are sure to follow up on these, but need to balance performance demands with their own personal happiness..

Commercial Loan Officer Salary And Outlook

How Much Do Loan Officers REALLY Make?

The median pay for loan officers is $63,650 per year, according to the Bureau of Labor Statistics. In 2016, there were 318,600 jobs available in this field, and the job outlook through 2026 shows that this career is expected to grow by 11 percent. This is faster than the national average.

Commercial loan officers receive health insurance and other job perks, including profit-sharing and bonuses for completing successful loans. Vacation and paid leave are also commonly offered, and some institutions provide additional perks such as stock options, clothing allowances, childcare services, and continuing education reimbursement.

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What Does A Commercial Loan Officer Do

There are certain skills that many commercial loan officers have in order to accomplish their responsibilities. By taking a look through resumes, we were able to narrow down the most common skills for a person in this position. We discovered that a lot of resumes listed initiative, interpersonal skills and detail oriented.

What Is The Average Salary For A Loan Officer Assistant

There isn’t an average salary for a loan officer assistant, as it depends on too many factors from the company where the assistant is employed, if they work hourly or for an annual salary, and experience. According to the BLS, financial clerks who may do similar work as an assistant to a loan officer earn a median salary of $41,520.

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What Does The Future Hold For Loan Officers

Lastly, let me point out that because of the way technology is going, the loan officer position might be at risk in the near future.

According to the site willrobotstakemyjob.com, loan officers have a 98% chance of losing their jobs to robots, aka automation.

At the moment, there are around 310,000 loan officers nationwide, and 8% growth is actually expected between now and 2024.

But at some point, they may be phased out thanks to disruptors in the tech and mortgage industry. In fact, were already seeing it with companies like 360 Mortgage Group and Homie.

So thats something to keep in mind as well, though as mentioned, it might be possible to make moves to other related positions that open up as a result of technological advances.

Education For Loan Officers

How Much Do Loan Officers REALLY Make? | How To Become A Loan Officer

Loan officers typically need a bachelor’s degree, usually in a field such as business or finance. Because commercial loan officers analyze the finances of businesses applying for credit, they need to understand general business accounting, including how to read financial statements.

Some jobseekers may be able to enter the occupation without a bachelor’s degree if they have related work experience, such as experience in sales, customer service, or banking.

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Quality Of Life For Commercial Loan Officer

With a take-home pay of roughly $4,739/month, and the median 2BR apartment rental price of $2,506/mo**, a Commercial Loan Officer would pay 52.88% of their monthly take-home salary towards rent.

** This rental cost was derived according to an online report at Apartment List*** Average cost of living was acquired from Numbeo’s Cost of Living Index

Loan Officer Salary Can Vary Widely

  • Similar to a real estate agents salary, a loan officers take home pay can range dramatically
  • It all depends on how much you sell/close in a given year
  • If youre a top loan officer, you can make a ton of money
  • If youre just an average or underperforming LO, expect comparably lower salaries

Wondering how much a loan officer makes an hour? Or what the average mortgage loan officer salary is?

Well, take note that most loan officers do not receive a base salary, only commission, so they are paid for performance. Sales performance.

The median income for a loan officer in the United States was $63,650 in 2016, according to the Bureau of Labor Statistics . That works out to an hourly wage of $30.60 per hour, which isnt terrible by any stretch.

My assumption is that the number wont change a great deal in 2017 or beyond, not that I would focus on the numbers from the Bureau of Labor Statistics anyway.

A better gauge might be the quarterly reports from a company called LBA Ware, which has a ton of data on loan officer compensation.

They said the average LO produced 51% more in volume during Q3 2020 versus $1.7M per month in the same period in 2019.

And per-loan commission was 106 basis points in the third quarter of 2020, meaning the average LO made over $27,000 per month.

That works out to over $300,000 annually if theyre able to keep that up consistently.

If you break that down as an hourly wage, it could be very high if loan volume is solid and efficiency is high as well .

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Technology To Get The Job Done Efficiently

Technologyhas played its part to make financial services more efficient however,mortgage banks havent used it that well in particular. Why do so many lendersstill rely on lots of paperwork and oldfax machines to process information?

Using oldmethods not only slows things down, butits annoying as well. Processing even a single loan involves handling a massive amount of information, making complexcomputations, and validating thousands of rules. Computers are way faster andaccurate in comparison to human loanofficers and of course, more efficient at processing information.

According tothe 2013 Oxford economic study, there isa 98% chance that computers will replace traditional loan officers in the future.

Although wedont entirely agree that the loan officers job should be automated. Wethink:

  • Computers should only do the calculations
  • Customers should have direct and transparent access to these calculations.
  • Human loan officers should provide support and guidance to the customers, and they should not be compensated with any commission to avoid any conflict of interest.

How To Be A Top Producing Loan Officer

How Much Does A Mortgage Loan Officer Make
  • 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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