Loan Officer Requirements and Career
A loan officer assists customers with loan applications for cars, college tuition, and homes. They help determine the appropriate loans for customers and make them aware of the requirements and stipulations. These professionals can specialize in consumer, mortgage, or commercial loans and often work for banks, mortgage companies, or credit unions. Some loan officers travel to meet with clients in their businesses or homes. The table below provides a quick overview of the profession:
|Degree Level||High school diploma or equivalent; bachelor's often preferred|
|Degree Field(s)||Finance, economics, business, or related field|
|License/Certification||Licensure required; voluntary certifications available|
|Key Skills||Good communication, interpersonal, and decision-making skills; knowledge of mortgage, loan, and financial institution policy and procedures|
|Loan Officer Salary (2018)||$76,270|
Source: U.S. Bureau of Labor Statistics
Becoming a Loan Officer
Some employers will require you to have a bachelor's degree in a business-related field, but the minimum requirement for loan officers is simply a high school diploma or equivalent. Licensure is required for mortgage loan officers and there are certification options, but they are voluntary.
The required experience varies, but two to five years' experience is often preferred. You'll also need good communication, interpersonal, and decision-making skills along with knowledge of mortgage, loan, and financial institution policy and procedures.
How to Become a Mortgage Loan Officer: 5 Steps
Here are five steps that detail a path one can take to become a mortgage loan officer.
Step 1: Earn a Bachelor's Degree
Although loan officers need at least a high school diploma, a bachelor's degree in business, economics, finance, or other related fields can help one secure a position in this field. Coursework for these programs typically includes accounting, mathematics, finance, economic statistics, and business statistics.
Since loan officers must be able to clearly answer any questions customers may have and guide them through the loan application process, excellent interpersonal and communication skills are needed to be successful in this position. While in school, you can take advantage of courses in communications, public speaking, and psychology.
Step 2: Gain the Necessary Work Experience
For many employers, previous experience is highly preferred. This is especially true for individuals who do not have a bachelor's degree and are seeking employment out of high school. Aspiring loan officers can establish themselves in the field by seeking employment in a variety of settings, including customer service, banking, and sales.
Step 3: Complete On-The-Job-Training
Participating in on-the-job-training is a requirement, regardless of what degree a loan officer has. The type of training received can vary depending on the work setting and may include a combination of informal training and company-sponsored training. Some training with specific software may be included as well, particularly for those involved in mortgage underwriting.
Step 4: Obtain a Mortgage Loan Officer License
All mortgage loan officers must be licensed as a mortgage loan originator (MLO). This process involves completing 20 hours of required coursework, passing an exam and a credit and background check. The MLO exam contains a national component and a state component that is unique for each state.
Completion of continuing education credits is needed to maintain an MLO license, which must be renewed on a yearly basis. This typically requires the completion of eight hours of continuing education courses each year. Other requirements may vary by state.
Step 5: Become Certified
Although certification is not a requirement for loan officers, obtaining certification may improve employment prospects. The Mortgage Bankers Association (MBA) and the American Bankers Association (ABA) offer opportunities for becoming certified. A few certifications offered by the ABA include:
- Certified Financial Marketing Professional (CFMP)
- Certified Lender Business Banker (CLBB)
- Certified Trust and Financial Advisor (CTFA)
The MBA offers a variety of certification options for mortgage bankers, including commercial, residential, executive, and master. These credentials require a minimum amount of work experience, successful completion of an examination, and the completion of continuing education courses.
Certifications offered by the ABA are usually renewed every three years. The renewal process will vary and may include completing continuing education credits, paying an annual fee, and adhering to the Institute of Certified Bankers' Professional Code of Ethics. CMB designations offered by the MBA must be renewed every two years. Earning five points of continuing education activities is required to maintain certification. This can be accomplished by completing coursework offered by the MBA, participating on committees, or attending conferences and conventions.