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.
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.
Loan Officer Duties And Responsibilities
This job generally requires the ability to do the following work:
- Meet with loan applicants to gather personal information and answer questions to evaluate their loan application and risk
- Explain to applicants the types and terms of each loan to determine a loan that is suitable for their specific needs
- Track and maintain credit and loan information
- Seek out new clients by contacting companies and people
- Work with existing clients to strengthen relationships, encourage referrals, and enhance your reputation among others seeking loans
- Work with borrowers who fail to make their loan payments on time
- Use loan underwriting software to make recommendations to customers
The majority of loan officer positions combine sales with analytic responsibilities, selling loans while determining appropriate clients and terms. Some positions are focused largely on the analytics, with no sales dimension and limited client contact. People in these types of jobs are sometimes called loan underwriters.
Other positions specialize in dealing with clients who are having problems meeting their payments. One example is a loan collection officer, who tries to work out agreements with troubled borrowers by adjusting the repayment terms.
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Job Description Of A Loan Officer
Loan officers meet with loan applicants and collect and verify all required financial documents. They determine if the person or business is qualified for a loan and review loan agreements to ensure they are in compliance with state and federal regulations. They also help the customer through the application process and enter information into a software program to determine the recommendation for a loan.
There are a few types of loan officers that specialize in certain areas such as commercial loan officers, consumer loan officers, mortgage loan officers, loan collection officers, and loan underwriters. Most work in office buildings such as at banks, financial institutions, and mortgage companies.
Why Loan Officers Are Better For Borrowers
The reason is that many face a lot of stress while looking for ways to obtain a loan, but if you meet with a loan officer, you can easily make your case for loan approval to a human than a machine.
Once you can work with a loan officer, you will get the right results than going for a bank or lender that automates the method with computer algorithms.
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The Experts Of Lending Products
Loan officers are representatives chosen of banks, credit unions, and other similar financial institutions who bridge the gap between loan borrowers and the authorities that are lending the loan. Moreover, loan officers have the liberty to work with an array of lending products for businesses and consumer needs, respectively. At the same time, they need to have in-depth knowledge of the lending products. Besides, they should be aware of banking laws and the required documents required for the whole process.
Licenses Certifications And Registrations
Mortgage loan officers must have a Mortgage Loan Originator license. To become licensed, they must complete prelicensing courses, pass a national exam, and submit to background and credit checks. Licenses must be renewed annually, and individual states may have additional requirements. Check your state licensing agency website for more information.
Several banking associations, including the American Bankers Association and the Mortgage Bankers Association, as well as a number of schools, offer courses, training programs, or certifications for loan officers. Although not required, certification shows dedication and expertise and thus may enhance a candidates employment opportunities.
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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 Choose A Loan Officer
Home buying can initially feel like an overwhelming, stressful process, but the right loan officer can pave the way for a smooth loan application process. So how do you choose the right loan officer for you?
To begin your search, start with lenders who have an excellent reputation for exceeding their customers expectations and maintaining industry standards. Once youve chosen a lender, you can then begin to narrow down your search by interviewing loan officers you may want to work with.
First, youll want to consider location when choosing a loan officer. A lender may offer branches across the nation, so youll want to find a branch thats closest to you. We have several loan officers you can work with at Assurance Financial. You can use your zip code to search for loan officers near you.
When you have your search narrowed down to a few choices, you can ask helpful questions that can lead you to choose the right loan officer for you. The following are a few questions you may want to address in a discussion with a loan officer:
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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.
Commercial Loan Officers: Salary Career Path Job Outlook Education And More
Commercial loan officers specialize in loans to businesses, which often use the loans to buy supplies and upgrade or expand operations. Commercial loans frequently are larger and more complicated than other types of loans. Because companies have such complex financial situations and statements, commercial loans usually require human judgment in addition to the analysis by underwriting software. Furthermore, some commercial loans are so large that no single bank will provide the entire amount requested. In such cases, loan officers may have to work with multiple banks to put together a package of loans.
- Education Required
- Loan officers typically need a bachelors 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.
- Training Required
- Once hired, loan officers usually receive some on-the-job training. This may be a combination of formal, company-sponsored training and informal training during the first few months on the job.
- Job Outlook
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A Better Impression For Agents And Sellers
From the moment you begin working with your loan officer, youve already started toward loan approval. The benefits of this can extend beyond the power to make the actual purchase. Being pre-approved shows sellers that you are a serious buyer. This added interest can be especially helpful in a competitive market where your loan approval can help separate you from the competition and allow you to purchase the home youve always wanted.
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Can Mortgage Loan Officers Make A Lot Of Money
The answer is yes, you can make a lot of money as a loan officer. But, like all career paths, you have to put your nose to the grindstone.
Loan officers are paid either on the front and/or on the back.
If a loan officer makes money on the front, it means they get paid for fees associated with processing a mortgage, often categorized as settlement costs or processing fees.
Getting paid on the back means that the bank filing for the loan gives money to the originator as commission.
You may notice that regardless of which structure you are paid as a loan officer, both require that you are closing loans correctly and efficiently.
If you are can balance a growing network of referral partners while properly vetting and educating your customers, a career as a loan officer can be quite lucrative. So how much money does a loan officer make? The answer, more so than in many other jobs, is that your income is up to you!
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What the Future Holds for Loan Officers
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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Should I Become A Loan Officer
The answer to this question may be Yes if
You are outgoingIn this line of work, you have to enjoy meeting all types of people and working directly with customers. Referrals can make or break your business, so a customer service focus, excellent communication skills, and a certain charisma and likeability are fundamental in the role.
You are a self-starterThe most successful loan officers are self-motivated. They are persistent without being annoying, and they have an entrepreneurial mentality.
You have a professional attitudeBy nature of the job description, loan officers help people and manage customer relationships. They are intimately involved with enabling people to make some of the most important life purchases. Personal accountability, trustworthiness, and integrity are paramount to succeed in this career. If clients dont trust you and respect your judgement, it will be impossible to establish a reputation of dependability and build a client base.
You are organizedLoan officers need to keep track of multiple loans in various states of progress. Organization and time management skills are key to handling this responsibility and efficiently responding to all kinds of correspondence with clients.
You can handle stressWorking with the public and in a service industry can be stressful. The capacity to remain calm in the face of challenges is one of the cornerstones of a potentially lucrative career as a loan officer. It will always serve a loan officer well.
A Smooth Process And Long
When youre making such a large and important purchase, you need someone you can trust at your side. The home buying process can be complicated, and having a lender to guide you through the process is invaluable in making the best decisions to benefit your budget and your lifestyle.
Your lender will serve as a subject matter expert, guiding you through each transition as well as answering your questions. They will let you know exactly what you need to bring to your closing. They will also walk through all the terms of the loan with you before you close so that you know what all the costs are. This assistance will empower you as a consumer and give you knowledge that will benefit you long-term.
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Loan Officer Career Advancement
- Its generally a lateral move from one shop to another based on compensation structure
- Other than going from say a junior loan officer to a senior loan officer
- Most LOs just switch companies to get better commissions
- Though it might be possible to open your own shop or become a sales manager as well
Loan officers generally stay in one place and dont advance internally within a company.
They may change their status to Senior Loan Officer, but usually it means very little aside from the fact that theyve been around a little longer than typical loan officers. There could be a bump in compensation levels though.
More likely, loan officers can advance externally if recruited by other companies paying higher commissions, or even a base salary. Or a mega bonus to jump ship.
Those who are able to create and manage a large book of business may wind up with a lot of suitors, and its not out of the realm of possibilities to be offered a six-figure bonus to change companies.
Many loan officers also apply for a brokers license as a means for advancement. And eventually employ their own loan officers, and take a cut off everything they earn.
In that sense, there are a variety of advancement opportunities for successful individuals. Its also possible to shift to the operations side of things if you turn out to be not much of a salesperson.
Is Being A Loan Officer A Good Career
The loan amounts you close and your basis points are going to depend on where you work and where youre located because its going to be tied to the average home sale price in your area. Overall, being a loan officer is a very rewarding career and has the potential to pay very well.
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