Let's Talk Mortgage Loan Originator Salaries
Considering a career as a mortgage loan originator or mortgage loan officer? Naturally one of the first questions you might have is: What is the salary for this type of work?
You likely want to know whether the salary is ideal for your needs before getting started. So, let’s first consider some basics and background information about this field.
What is a mortgage loan originator?
A mortgage loan originator is an expert who guides the home buyer through the process of loan application to closing on the property. The home buyer is also the borrower as they are seeking a mortgage loan.
In essence, the mortgage loan originator is the go-between between the borrower and lender. They oversee the entire process, making sure that all the moving pieces are in order and flowing in the right direction.
They make sure that the loan application and requisite paperwork are completed and filed correctly, and that all information is accurate and fully represented for successful loan processing.
From the time of loan application to mortgage closing, a loan mortgage originator might also work with underwriters and loan processors in a primary mortgage market. An underwriter reviews and evaluates someone’s risk.
The mortgage loan process is dependent on accurate and timely paperwork and documentation. Both home buyers and loaning organizations want paperwork and documentation to be filed correctly in order for the process to continue successfully. This is why mortgage loan officers are so important.
This process is so critical to the home-buying process that both first time home buyers and loan organizations want to make sure that the paperwork and documentation is in good hands. The loan organizations want to give loans to people who will be able to pay it back and the home buyer wants to get the best loan they can.
By virtue of being the expert, the mortgage loan officer mitigates the burden and eases any headaches of both parties. They play an integral part in the process.
What does a mortgage loan originator do?
Does this sound interesting so far? Let’s continue on and find out what a mortgage loan originator does at the ground level.
The very first step of a mortgage loan originator is to meet with a first-time home buyer or loan seeker. They usually do this in person or over the phone but these days with technology, correspondence can be anything that works for both parties.
The purpose of this meeting is for the mortgage loan originator to gather information to develop the profile of the loan seeker. This includes such information as income, credit score, and other related questions.
This job rewards such qualities as organization, attention to detail, and multitasking. Oftentimes, a mortgage loan originator is working with and juggling multiple loan applications at once and will need to maintain accuracy and integrity to each application. Any little mistake can grow into a big one later on so being meticulous is a strength in this field.
So how much do mortgage loan originators make?
Although being a mortgage loan officer has many benefits, it also comes with its own trials and difficulties.
For one, it requires a degree of meticulousness that’s not for everyone, as well as consistency in following up, completing detailed paperwork, and lots and lots of calls and communication.
One must be dedicated to make it all work. But, if you do, you will be financially rewarded with a comfortable living.
Although some do, not everyone is making six figures as a mortgage loan originator. It is more typical for people in this career field to earn anywhere from $50,000–$70,000 a year. And on the lower end, some mortgage loan originators, such as those earlier in their careers, earn about $40,000.
The range in salary depends on a number of factors, including location, commission-based salary, and education/experience.
Location
No matter what your job is, the geographical location and the company you work for will make a difference in salary. If you’re working in large, cosmopolitan cities such as New York or San Francisco, the salary will be much greater than someone who is working in a suburban or country locale.
Check what the average mortgage loan originator makes in your state and/or town to get a quick estimate of what to expect.
For this, Google is a useful tool and you can enter a search term such as the following, “mortgage loan originator average salary“ along with your city and state.
More great tools are platforms like Indeed and GlassDoor. These jobhunting platforms aggregate data from many different companies and offer information such as average salaries for positions in various cities and states. By filtering for salaries in your city and/or state, you can get a good idea of what salary range to expect.
It is also possible to call a mortgage loan originating firm directly and find out more information from their HR team. What helps most in this type of situation is to be polite when requesting information, but in general people are happy to help.
You can even ask around your personal and/or professional network for anybody who is in the field to talk about average salaries in your specific area or region and any follow up questions.
Commission
It is usually the case that mortgage loan officers’ salaries are commission-based. While some are commission only, others supplement their salary with commission made from loans. If one or the other appeals to you, make sure to find out the salary structure before applying for a position.
So how does commission work?
Since mortgage loan officers do such a great job of facilitating the loan application to completion, when the loan is granted, they receive a percentage of the loan as commission.
The bigger the loan, the bigger the commission and as such, this amount can end up being a nice, fat paycheck. Commission can make a huge difference in salary.
Experience
Lastly, mortgage loan originators are rewarded based on their level of experience. Those who are experienced and know how the industry and system work can use their knowledge to their advantage. These officers also tend to have more clients, thereby generating greater commission opportunities.
For example, those who have less than five years’ experience generally make about $40,000. Those who have between 5 to 10 years’ experience make about $46,000. Those who have between 10 to 20 years’ experience make about $49,000. Those who have more than 20 years’ experience make about $50,000.
These numbers may vary based on the geographical location of where you work and which company you work for, but what’s important here is the increase in salary.
With 15 years’ experience in the industry, there is potential for salary increase of $10,000 or more on average. And those who do a great job generate more income for themselves.
The best part is that there is no cap for commission-based salaries and the opportunity for financial growth is massive.
Education
At this point one might be wondering what education is necessary to become a mortgage loan originator. The good news is that this is not a job that requires a bachelor’s degree.
While some companies may prefer a bachelor’s degree, many others will accept non-degreed candidates who have experience in industries such as sales, customer service, or banking.
Although an undergraduate degree is not required, most people obtain a mortgage loan originator license. There are requisite steps to obtaining this license that include 20 hours of coursework and successfully passing the NMLS National and State test, as well as background and credit check.
Mortgage loan officers with a license are also required to renew their license every year and completing continuing education. Each state has their own requirements for renewal so check your state to find out more information.
We’ve covered a lot in this article, everything from what a mortgage loan originator is and what they do, to how much they make and how to increase earning potential.
Now that you have some background knowledge into the field and industry, we hope you can make an informed decision of whether to pursue this field.
As demonstrated, one can make a good living for oneself as a mortgage loan originator. The average annual salary is around $50,000 but the potential to increase this number is very high and all depends on you.
This earning potential attracts many would-be mortgage loan originators and why not – it’s a great way to earn a comfortable living helping people and using your natural skills.
