How To Negotiate The Best Mortgage Rate
When you shop for a home loan, compare offers from different competing lenders. There isnt usually much to be gained by working over an individual loan officer and trying to beat a better deal out of him or her.
However, lenders are rarely allowed to reduce your fees slightly under certain conditions. They may be allowed to do so in order to compete with another lenders pricing, if they have a policy in place that meets guidelines established by the Consumer Financial Protection Bureau.
Second, any discount cant be taken from the loan officer commission, except to defray certain unexpected increases in estimated settlement costs.
Fortunately, these days its easy to get a fistful of quotes online without putting on your boxing gloves.
Tactics To Watch Out For
As mentioned above, mortgage brokers may not always come up with the best possible offer if it’s not in their financial self-interest to do so.
Loan officers may have similar conflicts. Bear in mind that loan officers are essentially salespeople who get paid for selling you somethingspecifically, a loan. The loan that is best for you and the one that’s most lucrative for them may be two different things.
For example, be wary if a loan officer seems to be trying to steer you into an adjustable-rate mortgage . ARMs can be a good choice for certain people, especially those who know they won’t be in their home for very long. However, if you are planning to stay in your home for more than seven years or so, then an ARM may not be a very good choice, since the interest rate could dramatically increase over that period. A fixed-rate loan would be safer, even if it starts out with a higher interest rate.
Because it behooves loan officers to sell as many mortgages as possible, some may be tempted to steer you into an ARM with the idea of persuading you to refinance with a new loan in a year or two. If you find yourself in that situation, before you take them up on the offer you’ll want to find out:
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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It Only Takes A Stroke Of Your Pen To Get Someone On Their Way To Purchasing Their First Home Or Business Space
A bachelors degree isn’t always necessary to be a mortgage loan officer.
A mortgage isnt just a financial loan. It gives a family a home, a restaurant owner a space to serve up their favorite recipes, and a small business owner a place to bring their vision to life. Very few people can pay for real estate property out-of-pocket. As a mortgage loan officer, it only takes a stroke of your pen to get someone on their way to purchasing real estate. If you think youre the person for the job, learn how to become a mortgage loan officer.
While many people are involved in the loan process, mortgage loan officers are a key part of the mortgage industry. Theyre the ones who initiate fee-based mortgage loans that generate revenue for financial institutions and help borrowers get the funding they need. Mortgage loan officers enjoy flexible schedules, lucrative pay, and a steady demand for their services.
If a career as a mortgage loan officer interests you, Monster can help you seize the opportunity. Read on to find out how to become a mortgage loan officer.
How Many Loans Does The Average Loan Officer Close
Most credit officials close somewhere in the range of 18 to 25 advances in a year, with some doing upwards of 35 to 40. Since most mortgage loan officers chip away at commission, they may go through hours with forthcoming borrowers on loan situations. They likewise assist borrowers with improving FICO ratings, pull fundamental documentation, aid the finishing of utilizations, request title reports, check resources and attempt different exercises. Mortgage loan officers for the most part dont get paid if a forthcoming borrower chooses not to purchase or renegotiate, the application is denied, or the possibility changes moneylenders. Working for nothing is a major aspect of this business.
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What Training Is Required To Start This Career
Over the years, several states want their new loan officers to obtain a license before they are allowed to attend to customers. To obtain this license, there are varying requirements. But on average, they must complete several hours of education, pre-licensing education to be precise.
Most times, to get into the loan officer career, well, you simply need a total of about 20 hours of pre-license education. You have to pass the test and then, on average, complete eight hours of continuing education over the years.
How Are Loan Officers Compensated
Loan officer commission structure varies widely. MLOs who work in call centers might receive a flat salary, but most are paid on commission. Commissions are calculated according to the basis points of the loan: Each basis point is 1/100th of 1 percent, so 25 basis points, or BPS, equals 1/4 of 1 percent. For example, the commission of 25 BPS on a $100,000 mortgage would be $250.
According to a survey conducted by Inside Mortgage Finance, just under half of retail residential MLOs receive commissions that are between 75 and 150 basis points per loan.
âGo where you can get the very best training and support at the beginning of your career â donât worry about the BPS you get per loan in the beginning,â advises Joe Parsons, a mortgage originator in the San Francisco Bay Area, via a response on Quora.com. âOnce you have learned the ropes and have begun to build a reputation, and a book of business, youâll be in a far better position to look for the best commission schedule.â
Most loan officers close anywhere from 18 to 25 loans in a year, with some doing as many as 35 to 40. U.S. News ranks loan officers as #15 in its list of Best Business Jobs, with a median salary of $63,040.
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What Factors Influence How Much Mortgage Loan Originators Make
The real answer to how much does a mortgage loan originator make? depends on a variety of factors, including:
- Commission: One of the most influential factors that determines how much you can make as a mortgage loan officer is commission. Commission is generally based on a percentage of the loan amount.
- Region: As with any other job, mortgage loan originators may earn more based on the region they work in. This is because cost of living is a major factor in determining salaries across the U.S.
- Training: There is also job-specific training that aspiring loan officers can complete to make themselves more competitive. This of course is above and beyond passing the SAFE MLO Test, which is required to get licensedlearn more about NMLS test difficulty and preparation.
- Seniority level: As you move from junior mortgage loan officer to a senior mortgage loan officer, you can increase your compensation with additional business volume and sometimes additional responsibilities.
- Employer: There is not a set compensation that mortgage loan originators must make, but companies typically look to one another to determine how much to pay their employees. In some cases, certain employers may offer higher pay in order to beat out their competition when it comes to bringing on top talent.
What Does A Loan Officer Do On A Daily Basis
- 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.
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.
Occupational Employment And Wage Statistics
The Occupational Employment and Wage Statistics program produces employment and wage estimates annually for over 800 occupations. These estimates are available for the nation as a whole, for individual states, and for metropolitan and nonmetropolitan areas. The link below go to OEWS data maps for employment and wages by state and area.
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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.
How To Become A Mortgage Loan Officer
In the majority of the cases, a credit official requires a four year college education in finance or business. They have to comprehend general business bookkeeping and have the option to peruse fiscal reports so as to appropriately break down the accounts of those applying for credit.
Now and again, it might be conceivable to enter this activity without a four year certification in the event that you have related work experience, for example, banking, deals, or client support. Hands on preparing is normally given once you have been utilized and ordinarily incorporates a mix of casual preparing and formal organization supported preparing. A home loan credit official requires a Mortgage Loan Originator permit. To obtain this permit you should finish 20 hours of coursework, breeze through the test, and pass a credit and personal investigation. Many financial affiliations offer courses for affirmation which may give you a favorable position for an occupation.
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What Does A Typical Day Look Like For A Mortgage Loan Officer
It depends. If you choose to work for a large corporation like a bank or a mortgage banker, or a smaller shop, your days will be very different.
The Bank Work Environment
If you are working in a large, corporate environment, you can expect you day to be more traditionally structured. Not all, but most, large mortgage banks will want their employees in the office from 9 a.m. to 5 p.m. The dress code and office environment will probably be more formal.
The Small Business Work Environment
If you choose to work for yourself or for a smaller branch, your day can vary wildly depending on personal preference and company expectations. Some LOs choose to come into the office later in the morning, and stay past traditional work hours in order to call potential leads when they are home in the evenings. Others hit the ground running in the early morning so that they can leave by mid afternoon.
In these situations, its often up to the individual to determine the work schedule that works best for them. Its all about closing loans, so however you can do that most successfully is the way youll want to plan your day or week.
Why Refinance Home Loan
Category: Loans 1. When Should You Refinance a Home? Forbes Advisor Oct 1, 2020 Refinancing can lower your monthly mortgage payment by reducing your interest rate or increasing your loan term. Refinancing also can lower your Getting a new mortgage to replace the original is called refinancing. Refinancing
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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.
Is A Loan Officer Salary Worth It
We have shown you how a loan officer makes money, the education requirements for becoming a loan officer and career advancement for a loan officer. Being a loan officer is a lucrative career path with the right structure, relationships, and processing support.
You dont necessarily need a bachelors degree or experience to become a loan officer. In fact, you may be hired by a small mortgage broker even if you dont have any notable sales experience or a bachelors degree.
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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.