How Can I Become a Loan Officer in 2022: Full Guide –

Do you wish to become a commercial loan officer? Are you looking for a mortgage loan originator that will help you secure a house? This is an opportunity for you to learn how to become a licensed loan officer.

Basically, whenever an individual or business needs a loan, they meet a loan officer at a bank, credit union, or lending company. As a loan processor, you will typically be rendering services to clients seeking a loan. This occupation is an interesting and service-based one.

Hence, this article tells the basics of the career, the job opportunities that await you, how much salary you may take home, and a step-by-step guide on how to become one.

Generally, a lot of people don’t know how to apply for tuition, cars, and home loans. So, they usually run to a loan officer for guidance.  

Well, to be a well sought-after loan officer, you will need good financial judgment which has to come from quality education and on-the-job training.

So, now you know that the demand for loan officers will continuously increase by the day, let’s get you started on this career journey.

Who is a Loan Officer?

This is someone that represents a bank or any financial institution to help borrowers of a loan in the application process. Also, this commercial loan officer has a wide knowledge of the various types of loans that a bank can give.

Also, a licensed mortgage loan officer knows the requirements for applicants to be eligible for each type of loan.

So, they can specialize in consumer, mortgage, or commercial loans. They always work for commercial banks, mortgage companies, or credit unions. Above all, loan officers act as a contact between the institution and the applicant. They also seek to find a loan arrangement that will suit both parties.

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What Does A Loan Processing Officer Do?

Actually, loan officers help customers with loan applications for cars, college tuition, homes, and businesses. They are professionals at assessing the financial situation of anyone seeking a loan.

Additionally, they are conscious of loans that will fit just about every financial situation. Loan processors decide the applicant’s ability to pay back the loan according to the various requirements and conditions of the institution they represent.

Obviously, some applicants may be just starting a credit history while some of them may be in the process of getting over a severe financial crisis. So, mortgage loan officers are able to give find the best fit for the applicants. Also, they recommend future promotional specials on loans, or any special interest rates that are offered for only a short period of time.

Finally, loan processing officers are now able to check applications for loans online. Applicants seeking loans can have contact with a lot of loan institutions rather than depending on just their local bank.

How Long Will it take me to become a Commercial Loan Officer?

Well, some banks and mortgage companies need loan processors to have a bachelor’s degree in business, economics, or finance. Honestly, it can take you about four years to qualify for these jobs.

Also, it can take many weeks or months to meet the pre-licensing education requirements. Similarly, passing the examination to become a licensed mortgage loan officer also takes this same time.

What is a Loan Officer’s Salary?

According to Indeed, the average salary for a loan officer a year in 2019 was $73,650. In fact, the lowest 10% of wage earners in this field according to the BLS, make a salary that is just under $32,820 per year while earners in the top 10% earn a median salary of over $132,290.

Additionally, wages change based on the employer as well as job performance. Some loan processing officers earn a flat salary or an hourly rate. Similarly, other loan processors get a commission on top of their regular compensation.

Basically, these commissions depend on the number of loans the loan officers create and how their loans are repaid.

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What is the Job Outlook for Loan Processors?

The hiring of loan officers is estimated to grow 8 percent from 2018 to 2028, faster than the average for all occupations. Basically, the need for commercial loan officers will increase as the whole economy grows, though the decrease in the number of bank branches may reduce employment growth.

Similarly, the growth in the economy will lead to more demand for loan processors. This is because both businesses and individuals will want credit to finance commercial investment and personal expenses. 

Finally, an increase in the use of technology for processing loans may reduce the employment growth of loan officers over the decade. Currently, there is an increase in the use of computer software by licensed mortgage loan officers so as to efficiently process data and loan information.

Thus, this will surely reduce interactions between loan processors and customers. In fact, this will lead to the employment of fewer officers to process loan applications.    

What Requirements Do I Need to Be a Licensed Mortgage Loan Officer?

The requirements you need to be a loan officer include education, training, and licensure. You need to have a minimum of a high school diploma, even though some employers need a bachelor’s degree in finance or a related field.

However, financial institutions give on-the-job training for commercial loan officers. Employers usually tend to consider job seekers with experience in the finance or customer service industry more.

On the other hand, a mortgage loan originator (MLO) certificate is needed in all states. In addition, the Mortgage Bankers Association and the American Bankers Association give voluntary additional licenses.

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How to Become a Loan Processing Officer?

#1: Earn a bachelor’s degree

Actually, loan officers need a minimum of a high school diploma. But advanced positions like commercial loan officers need a bachelor’s degree in business, economics, finance, or other related fields.

However, acquiring a degree in any of these fields can prepare a commercial loan officer to study the finances of a business, read financial statements, and understand the principles of business accounting.

Moreover, the courses for these programs are accounting, mathematics, finance, economic statistics, and business statistics.

Also, loan officers must have excellent interpersonal and communication skills to be successful in this position. This is needed for them to be able to clearly answer any questions customers may have and guide them through the loan application process. However, if you’re in school, you should do courses in communications, public speaking, and psychology.

#2: Obtain the required work experience

Many employers always prefer loan processors with previous experience. In fact, this is especially true for those that do not have a bachelor’s degree and are seeking employment out of high school.

However, intending loan officers can develop themselves in the field by seeking employment in several firms, such as customer service, banking, and sales.

#3: Complete on-the-job-training

Basically, taking part in on-the-job-training is a requirement, notwithstanding your degree as a loan officer. The type of training you receive can differ depending on the work environment.

Also, it may involve a mixture of informal training and company-sponsored training. Certainly, training with certain software is part of the on-the-job training one should expect especially those who are into mortgage underwriting.

#4: Acquire a Mortgage Loan Officer License

Importantly, to practice and be more efficient in your duties, you must be certified as a mortgage loan originator (MLO). Well, this process includes finishing the required coursework of 20 hours, passing an exam and a credit with a background check.

Also, the MLO exam has a national component and a state component that is special for each state.

Furthermore, finishing continuing education credits is required to maintain an MLO license, and it has to be renewed every year. Besides, this usually needs the completion of eight hours of continuing education courses a year.

#5: Get a certification

Honestly, certification is not a prerequisite for loan processing officers, though getting a license may improve employment prospects.

Basically, you can gain more opportunities from the Mortgage Bankers Association (MBA) and the American Bankers Association (ABA) once you’re certified. The certifications which the ABA offer include:

  • Certified Lender Business Banker (CLBB)
  • (CTFA) Certified Trust and Financial Advisor
  • Certified Financial Marketing Professional (CFMP)

Actually, the MBA gives different certification options for mortgage bankers, such as commercial, residential, executive, and master. Also, these qualifications need at least a little amount of work experience, successful completion of an examination, and the completion of continuing education courses.

Also, certifications that the ABA offers are always renewed every three years. The process of renewing the certifications will differ and may involve finishing continuing education credits, paying a yearly fee, and sticking to the Institute of Certified Bankers’ Professional Code of Ethics.

Thus, CMB names which the MBA gives must be revived every two years.

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How Can I find a Job as a Mortgage Loan Originator?

Actually, you can get loan processor jobs via the typical channels of online job boards and community resources. Also, several banks post information about job opportunities on their websites.

At least, you can check with banks, credit unions, and other financial institutions around for any possible job opening. Also, you can check on your school’s alumni network to make contacts for any job vacancy.

How Can I Become a work-from-home loan officer?

#1. Education and Training

Many loan officers start their careers with degrees in finance, business or other related studies. Although, there are many classes and some licenses available to improve a newcomer’s chance of becoming a mortgage loan originator.

In this case, an example of such is the American Banker’s Association Certificate in Loan Review. In fact, mortgage loan officers without degrees or certifications usually get to their position from many years of working in financial services or sales.

Also, make sure that you take extra computer and finance classes to make yourself stand out from others in the job-hunting process.

On the other hand, don’t worry too much if you have to work in a similar field like a bank officer or teller, for a year or so, to gain the required experience.

#2. Set up your home business

So many loan processors work at banks and other lending institutions, but an increasing number are employed in a home-based operation. Actually, they are still representatives of the organization but are permitted to do much of their work from a home.

Basically, mothers normally like to hold this kind of position. In situations like this, the loan officer will train the person using their particular system and regulations and then give them at-home-office with everything he/she needs to do their job.

Well, you still might be needed to travel a lot. But in this situation, you’ll be visiting the people and businesses you are helping to acquire loans. Above all, you can do most of your work from your own home.

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#3. Market yourself

Well, the main way to sell yourself as a loan processing officer is through networking. Several people are going to need a loan or more in their lives, and they will like to have a trusted associate to succeed them.

Also, make sure that you have business cards on you at all times and be ready to make it available whenever the need arises. However, try and make relationships with real estate agents, mortgage brokers, and loan processors.

Besides, the position of a work-at-home licensed mortgage loan officer is not usually as relaxed a pace as other at-home jobs. But, the benefits can be as impressive as the labor consumed.

Honestly, a work-at-home-loan processor is a nice choice for a woman with an intense work principle and competitive spirit.

FAQs on how to become a commercial loan officer?

How many loans does a loan officer close?

Most loan officers can close between 18 to 25 loans in a year, while some loan processors close as many as 35 to 40.

What skills do I need to become a loan officer?

For you to be a loan officer, you need to have the following:
1. Reading comprehension – medium (Level 5)
2. Active listening – medium (Level 5)
3. Speaking – medium (Level 5)
4. Critical thinking – medium (Level 4)
5. Active learning – medium (Level 3)
6. Monitoring – medium (Level 3)
7. Mathematics – medium (Level 3)
8. Writing – medium (Level 3)

What are the types of loans?

There are four types of loans. They are:
1. Long-Term Loans
2. Short-Term Loans
3. Lines of Credit
4. Alternative Financing

What kind of loans can a bank offer?

1. Secured Loans
2. Unsecured Loans
3. Fixed Rate Loans
4. Variable Rate Loans
5. Convertible Rate Loans
6. Installment Loans

How many hours can I expect to work as a loan officer?

Well, in a normal work week as a loan processing officer, you can expect to work more than 40 hours a week.

How can I learn more about how to become a commercial loan officer?

You can know more about how to become a loan officer through groups like the American Bankers Association, the Association of Mortgage Professionals, and the Mortgage Bankers Association.

Conclusion

Loan processors help customers with loan applications for cars, college tuition, and homes. Also, they help the customers to know the appropriate loans for them let them know of the requirements and stipulations.

Moreover, they can specialize in consumer, mortgage, or commercial loans. In fact, they usually work for banks, mortgage companies, or credit unions. Some loan officers travel to meet with clients in their businesses or homes.

Furthermore, the different types of loan officers include commercial loan officers, consumer loan officers, and mortgage loan officers.

Commercial loan officers train in business loans, consumer loan officers specialize exclusively with loans to individuals, while mortgage loan officers specialize only in real estate-related lending.

Finally, certification isn’t needed to become a mortgage loan originator but it can be a good way to improve your chances of securing a job.

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