Being A Successful Agent Requires Perseverance
If you want to pursue a career as a loan officer, youll want to know how much mortgage loan officers make. These individuals are paid based on sales, so pay varies depending on several factors, including their skills and experience.
A loan officer may work for a company or on an individual basis. However, most people usually work for a bank or other financial institution. The loan officer is responsible for guiding the borrower through the approval process of their application.
Best Business Jobs ranked the profession of a loan officer as the 8th best job, thanks to its satisfaction rate. In addition to salary, future growth, work-life balance, and work stress, among other positive factors that invite the practice of this profession.
How Much Does A Loan Officer Make An Hour Is Loan Officer A Sales Job
What tipped you off? Those lopsided production numbers? Yes, like any job that pays on commission, the loan officer role is a sales job.
The loan officer may be the public face of the lending institution. He or she may take seriously the role of screening out unqualified borrowers.
At the end of the day, however, the officer is there to close deals. Otherwise, he or she does not get paid. All the rules of closing a sale apply, including:
- Building rapport
- Overcoming objections
- Closing / Asking for the sale
In a perfect world, the loan officer only closes qualified clients into products that meet their needs. After all, no one is happy if an application is denied least of all the loan officer, who isnt getting paid.
Still, the chase for those commissions leads to a can-do attitude that promises the world. I can get yo the loan! I can get you the loan! I can definitely get you the loan! Two days after application: Sorry, I couldnt get you the loan.
Remember, in big-ticket sales, there is little or no limit to how much money a talented salesperson can earn per hour. The deeper the prospect pipeline, the better the closer, the fatter the loan balances, the more money the loan officer takes home.
When meeting with a loan officer, remember you may be paying more than you have to for that loan. The loan officer may steer you toward products that generate higher commissions.
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So now as we lie in the wake of the housing bubble bust, are loan officers still making money? The answer is a resounding YES, but the number of loan officers has probably been cut in half, if not more in the past few years or so.
At the same time, the quality of mortgage loans at the moment isnt what is once was a few years ago.
It seems most of the smart money already refinanced, or made home purchases before values went up. And many of the remaining deals are tricky and/or riddled with hurdles and low credit scores.
In truth, it can always feel that way when youre trying to get a home loan approved a mortgage loan originators typical day will never be easy.
But theres always an opportunity for a loan officer, even if the market is in a down cycle or a lull. Even if mortgage rates arent as low as they once were.
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Mortgage Loan Officer Education Requirements
Since mortgage loan officers analyze the finances and credit of potential borrowers, a good place to start is a bachelors degree in business or finance. During your coursework, youll learn some accounting skills, including the ability to read financial statements.
If you need help getting started, check out these mortgage loan officer scholarships. They can help to cover some of the costs of your education so that you can focus on preparing for your career.
You dont always need a bachelors degree to land a job as a mortgage loan officer. Some banks will hire candidates who have several years of hands-on banking, customer service, or sales experience and are willing to learn on the job.
How Do You Save Money
When getting mortgage quotes, if two of the biggest drivers behind how much you will pay for your mortgage to be originated are what type of lender does your loan officer work at and how is your loan officer paid which one is best?
If it were me, and I were shopping for a loan officer I would start by asking them the direct question of how do you get paid?
And then listen very carefully to their answer, because understanding what is going on behind the scenes can sometimes make all the difference.
Note: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinion or position of Zillow.
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Avoiding Mortgage Broker Fees
Whether you choose to use a broker or not, getting multiple mortgage quotes is likely to translate to actual savings. According to a 2018 Freddie Mac report, borrowers save an average of $3,000 over the life of the loan by getting at least five quotes from lenders.
So for borrowers who dont have the time or ability to research loan options independently, the savings delivered by obtaining a range of estimates from a mortgage broker can help offset the brokers fees. But if a brokers commission comes out to more than $3,000, you may want to consider switching to someone with a different fee structure.
For example, a broker that charges a 2% rate on a $250,000 loan would receive $5,000, but a broker charging a 1% rate would only receive $2,500. Of course, this is only an average and every case will be different, but calling around to multiple brokers could mean that youd retain more of your savings from finding the right loan. Borrowers could also elect to bypass the broker entirely.
Many online resources enable home buyers to research loan options themselves and avoid paying mortgage broker fees. Mortgages are not one-size-fits-all, and a borrowers circumstances can help narrow their search. For example, some lenders specialize in working with first-time home buyers, while borrowers with little saved for a down payment may want to compare lenders that offer FHA loans.
Would This Occupation Be Compatible With Your Personality And Interests
The Holland Codes or the Holland Occupational Themes refers to a career and vocational choice theory. After taking a RIASEC assessment, your results show your scores across six different occupational themes: Realistic , Investigative , Artistic , Social , Enterprising , and Conventional .
The Strong Interest Inventory is the gold standard for figuring out your interests, but it is a controlled assessment. It isn’t free. You need a certified professional to administer it to you. A free alternative evaluation is available here.
Loan officers scored high in the Conventional and Enterprising themes.
People that score high in the conventional theme describe themselves as practical, organized, conscientious, orderly, and careful. They are often motivated by organizing and managing information.
Moreover, people that score high in the enterprising theme describe themselves as ambitious, competitive, persuasive, assertive, and energetic. Often, they are motivated by persuading, selling, and leading.
Loan officers process documents and assist people, so it’s not surprising that their Holland Codes show that they are good at handling information and dealing with people. They have excellent organization, persuasion, and leadership skills.
The Myers-Briggs Type Indicator is a self-report questionnaire indicating differing psychological preferences in perceiving the world and making decisions. Many people discover their Myers-Briggs type to help determine which career to go into.
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Do You Need A Degree To Become A Mortgage Loan Officer
A person seeking to become a mortgage broker must be at least 18 years old. A bachelors degree and some experience in finance and sales is helpful to becoming a mortgage loan officer, but is not required. All state-licensed loan originators must pass a national exam required under the SAFE Act.
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.
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How Much Do Loan Officers Earn
The 2017 median annual salary for loan officers was $64,660, according to the BLS. This works out to an hourly wage of approximately $31.09.* The BLS reports that loan officer earning potential can vary significantly depending on what sector a loan officer works in:
- In automobile dealerships, loan officers earn $82,230*
- In company management, loan officers earn $68,740 *
- In credit intermediation, loan officers earn $63,420*
Keep in mind that compensation for many loan officer positions may be based on commissionwhich can make earning potential somewhat volatile.
The Best Tools For The Job
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.
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.
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How Many Loans Does The Average Loan Officer Close
That last figure begs another question how many transactions do loan brokers close per month? Per year?
Theres the simple answer loan officers close an average of 2.8 loans per month across the industry. Dig into the figures, however, and we see a huge pay gap open up. The top 20% of loan officers originate 57% of the loan volume. The bottom 40% of loan officers originate under 7% of the loan volume.
Break down those numbers, and you find that the top 20% close eight or more transactions per month. For the bottom 40%, that number is less than one loan per month. That income profile may not even break the poverty line.
Mortgage Loan Officer Tasks
Here is an overview of the typical tasks of a mortgage loan officer:
- Work directly with clients to negotiate loans and terms, explain programs, and review agreements
- Maintain and track loan and credit data
- Generate referrals and new clients by building strong relationships
- Compile and obtain monetary information to assess the loan applications and their risk
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How To Become A Mortgage Loan Officer
The path to becoming a mortgage loan officer usually begins with getting a bachelors degree. Most loan officers earn a degree in finance, business, accounting, or a related field. Potential loan officers must also earn their mortgage loan originator license by passing required classes and a test. Renewing a mortgage loan originator license also requires at least eight hours of classes.
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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How Much Can An Entry Level Mortgage Loan Originator Make
Mortgage loan originators, also known as loan officers, are responsible for making decisions about issuing mortgages to consumers. They typically have backgrounds in banking and business finance, and, depending on their employer, may take full responsibility for approving a mortgage loan from initial application to final approval and disbursement. The job requires careful attention to detail and a willingness to thoroughly investigate all information provided on applications.
How Does A Lender Get Paid
Lendersmoneylendersmake moneylendersmake money
. Just so, how much do mortgage lenders make on a loan?
According to the US Bureau of Labor Statistics , the median pay in 2015 for loan officers of all kinds commercial, consumer, and mortgage was $63,430 per year. The lowest ten percent earned less than $32,870, and the highest ten percent earned more than $130,630. Loan agent compensation varies widely.
Also Know, do loan officers make good money? Loan Officers made a median salary of $63,040 in 2018. The best-paid 25 percent made $92,240 that year, while the lowest-paid 25 percent made $44,500.
Also know, how much profit does a bank make on a mortgage?
The monthly mortgage payment, 6% of $200,000, is $1,199. However, when adding in the origination fee of $4,000 and dividing it out over the 30-year loan, the payments increase by $11.11 per month for a total monthly payment of $1,210. Overall, the homeowner pays an 8% interest rate rather than the perceived 6% rate.
Do loan officers get commission?
Mortgage loan officers typically get paid 1% of the total loan amount. We explore the reasons why loan officer commission is bad for consumers. In return for this service, the typical loan officer is paid 1% of the loan amount in commission. On a $500,000 loan, thats a commission of $5,000.
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Could You Thrive In A Rewarding Career As Loan Officer
The ability to help others on a day-to-day basis as a loan officer can be very rewarding. Even during the difficult moments during which they have to turn applicants down for a loan or collect collateral from struggling clients, impactful loan officers can still make the circumstance a positive one. By forming relationships with the clients and potentially helping them become qualified, top professionals have the opportunity to transform the scenario into a positive, rewarding experience, Wallace says.
Between solid, commission-based earning potential, steady employment prospects and the satisfaction of making peoples dreams come true, becoming a loan officer could be the gratifying career path youve been seeking. If youre considering taking a step into the world of finance, youll want to consider investing in a degree. To learn more, check out our article, Is a Finance Degree Worth It? 4 Factors Impacting Your Finance Career Forecast.
*Bureau of Labor Statistics, U.S. Department of Labor, Occupational Outlook Handbook, www.bls.gov/ooh/. Salary data represents national, averaged earnings for the occupations listed and includes workers at all levels of education and experience. This data does not represent starting salaries and employment conditions in your area may vary. **Burning-Glass.com
Frequently Asked Questions About A Loan Officer Salaries
The national average salary for a Loan Officer is $40,961 per year in Canada. Filter by location to see a Loan Officer salaries in your area. Salaries estimates are based on 21 salaries submitted anonymously to Glassdoor by a Loan Officer employees.
The highest salary for a Loan Officer in Canada is $57,689 per year.
The lowest salary for a Loan Officer in Canada is $29,084 per year.
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How Much Do Mortgage Loan Officers Make
A mortgage loan officer position can offer you a fulfilling career with good pay in the mortgage industry. A loan officer in the United States earns, on average, about $50,000 a year. Some earn commission on top of that. You can become a mortgage loan officer by earning a bachelors degree, taking required classes, and passing a test to get your license.
There are many important factors when choosing a job. Salary, work-life balance, and the work environment are all things one should consider when thinking about what career you want. For those looking for a dependable, well-paying job in a good environment, becoming a mortgage loan officer is a position worth considering.
Loan officers generally work a 40-hour workweek and receive benefits. Most loan officers have a steady income, earning around $50,000 per year. Compared to other businesses in the mortgage industry, a loan officers job is not too stressful. Overall, becoming a mortgage loan originator could be a great career route for anyone interested in business, finance, accounting, or thse mortgage industry in general.