Is Being an MLO Right For You?
Is a change in career calling you? Does a job that utilizes business and entrepreneurial skills while rewarding you with financial opportunities and flexibility appeal to you? If so, mortgage lending might be the change you’re looking for!
In terms of financial purchases, a home is oftentimes the biggest purchase most buyers will ever make. To help facilitate this purchase, Mortgage Loan Originators (MLO) guide these buyers through the process. They educate the buyer and guide them through the entire process all the way to closing. It is possible to help people and earn a lucrative living doing what you love!
What does a typical day in the life of a Mortgage Loan Originator look like?
As stated, a Mortgage Loan Originator is a knowledgeable guide for home buyers through the process from start to finish.
The first step for an MLO is to have an initial conversation with a client through an in-person meeting or telephone call. This conversation will cover the basics, such as the purpose of the loan, credit terms, and what options are available to the buyer.
It’s also helpful to share a bit about the loan process, as well as rates of interests and any questions regarding completing the application. This application is used by the lender to determine whether to approve the loan and under what terms.
A prospective buyer will then prepare and/or retrieve important information. This includes verification of their income, the specific amount of the loan and repayment terms, and any outstanding debts that they may owe.
When you receive this information, you must then verify it by accessing the client’s financial history and credit score online to determine their creditworthiness
Once approved, we get to the closing portion of this process. As the MLO, you will need to meet with both the buyer and seller. This meeting gives an opportunity to discuss discounts, fees, closing costs, and coordinate the legal exchange of the property and purchase.
Building Your Client Base?
In essence, MLO’s are salespeople. They build and develop relationships with commercial and residential real estate agencies. This is an important step in the process that will set the MLO up for success because these agencies then refer home buyers to the MLO as potential clients to work with.
In this line of work as an MLO, one can expect some degree of travel. The necessary resources are basic and include a laptop and cellphone to keep in contact with home buyer clients, as well as your office.
This job could look different from day to day. Many MLO’s are working from home or on the road, meeting clients and visiting offices. The daily tasks might change daily, this keeps things interesting for those who favor a more varied schedule.
What about financial compensation?
So, let’s get to the good part. A big question for anybody considering a change in career is what is the salary?
Most MLO’s are compensated only by commission. This means that they are paid a percentage of the value of the loans that they originate. The benefit of this structure of payment is there is greater motivation to originate loans and the sky is the limit. There is no ceiling to what is possible to earn.
With that said, some organizations do offer a salary to MLO’s and others offer salary plus commission or bonus.
There are some industry trends that can portend an upsurge in business for MLO’s. With low interest rates or when economic growth is on the rise, the real estate market gets hot and there is an increase in sales, as well as greater mortgage refinancing.
With more buyers on the market, more MLO’s are needed. And with such high demand in real estate, the potential for MLO’s to earn more increases as well. As the saying goes, one should strike while the iron is hot!
MLO’s should put in their biggest effort during these peaks in demand. By doing so, they can greatly maximize their earning potential. Overall, making a six-figure income is quite common in this industry and it’s up to you to make it happen.
Looking to get started?
Did this article pique your interest in becoming an MLO? If so, here’s how to do it.
New MLO’s must complete 20 hours of education as required by federal law and approved by the Nationwide Mortgage Licensing System (NMLS). This education includes federal laws related to mortgages, consumer protection, ethics, fraud, fair lending, and standards for mortgage products.
First, you’ll want to prepare for the exam. Check which prep course will work best for your level of experience.
Next, check which pre-licensing course is required by your state and complete it. Once complete, you must take the NMLS mortgage exam.
You’ve passed? Congratulations! Now, you’re ready to start your new career as an MLO!
