Top 10 HOW DO MORTGAGE LOAN OFFICERS GET PAID? Answers

Being a Loan Officer Can Be Really Lucrative

  • There are few jobs other than doctors, lawyers, and sports stars
  • That pay several hundred thousand dollars a year in salary
  • Top loan officers have the potential to make that kind of money too
  • And even average ones can make six-figures annually during good years

If a mortgage loan officer gets just one of those deals to go through, it often equates to a huge payday, sometimes as much as a few months’ salary working a minimum wage job or other lower paying jobs.

So that’s the incentive, big money. But there are a number of questions you need to ask yourself before setting out in the mortgage industry as a loan officer.

First and foremost, it is not an easy job. Sure, a mortgage broker or bank may tell you that it’s simple. And yes, you may not have to work very hard in the traditional sense, or take part in any back-breaking work.

But factor in the stress, the near misses, lost deals, the shots to your ego, and the wheel-spinning and it isn’t as effortless as they may make it out to be.

You will see deals fall through and you will waste a lot of time. You will have mental breakdowns as loans slip through your fingers, and brokers and real estate agents scream at you as deadlines close in.

You will undoubtedly make mistakes, which will require a phone call to the borrower to let them know you can’t do the deal. It will be embarrassing and unpleasant.

But if you can handle all that, being a loan officer can be quite lucrative, and fairly easy if you get yourself organized and educated on mortgages and the many loan options available to homeowners.

It’s not for everyone, and there is definitely a lot you need to learn before starting a career in mortgage. But once you get a taste of the money you may have trouble walking away, no matter how high the stress and quality of your life.

Trust me, I know lots of people who can’t leave. They want to leave, but they can’t because they know they won’t earn as much elsewhere. And they’ll probably hate that other job too.

All that aside, let’s look at a loan officer’s typical day, not that any day is ever typical…

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Highest paying cities for Loan Officers in United States

  1. Irvine, CA $152,413 per year 153 salaries reported

  2. Detroit, MI $142,895 per year 39 salaries reported

  3. Scottsdale, AZ $139,266 per year 68 salaries reported

  1. San Diego, CA $139,240 per year 172 salaries reported

  2. Phoenix, AZ $129,800 per year 82 salaries reported

  3. San Antonio, TX $128,962 per year 53 salaries reported

  1. Dallas, TX $120,886 per year 82 salaries reported

  2. Houston, TX $119,747 per year 122 salaries reported

  3. Tampa, FL $115,305 per year 113 salaries reported

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7. Should You Work With A Mortgage Broker? – Forbes Advisor

Jul 8, 2020 — There are two basic ways mortgage brokers may be compensated: through fees paid by borrowers or commissions paid by lenders. The exact amounts (21)

Mortgage loan officers (MLO’s) do more than just collect documents and fill out forms. Can mortgage loan officers make a lot of money?(22)

Loan originators may not receive compensation based on mortgage related business? Does the profits-based compensation paid to the.(23)

2. The best tools for the job

While technology has made financial services more efficient overall, mortgage banks in particular haven’t kept pace. What other reason could there be why so many lenders rely on physical paper and fax machines to share information?

Using antiquated tools is not only slow and annoying, it’s also a failure to use the best tools for the job. Making even a single loan involves handling huge amounts of data, performing complex calculations, and validating thousands of rules. Compared to human loan officers, computers are orders of magnitude faster, more accurate, and more efficient at doing these things.

A 2013 Oxford economic study of jobs susceptible to automation determined that the traditional role played by loan officers has a 98% likelihood of being replaced by computers.1

We don’t fully agree that loan officer jobs should be automated. We believe:

  • Computer systems should do the calculations.
  • Borrowers should have direct, transparent access to these systems.
  • Human loan officers should be available to offer support and expert guidance to borrowers — provided they aren’t being paid commission that skews their interests.
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Loan Officer Duties and Requirements

Loan officers communicate with numerous individuals to facilitate the lending process for banking clients. Loan products that may involve a loan officer can include personal loans, mortgage loans, and lines of credit. They work with a wide variety of lending products and have a comprehensive awareness of them and banking industry protocols, giving borrowers greater confidence in executing a lending deal.

Loan officers are a direct source of contact for borrowers seeking loans from financial institutions. Many borrowers prefer working with a loan officer directly to ensure that all of their needs are met. While traditional bank lending procedures can be more time-intensive, personal interaction often gives borrowers greater confidence in executing a lending deal.

This financial career requires a bachelor's degree, and most applicants earn a degree in business, finance, accounting, or a related field. In some cases, people who have experience in a related business career can enter this field without a bachelor's degree.

Many employers offer a great deal of on-the-job training, but mortgage lenders must take classes and pass a test to get their mortgage originator's license.

4. How mortgage loan originators are compensated First

Aug 28, 2018 — Much like a real estate agent, MLOs negotiate their percentage fee — commonly referred to as commission — with their broker. At small boutique (9)

Compensation for mortgage officers can be based on commission, salary, or a combination of the two. BLS statistics show that, as of May 2017, the median average (10)

Most MLOs in North Carolina are paid a base salary plus commission. The potential to earn sales commission on every loan that goes through is the reason why (11)

How do mortgage loan officers get paid? — Mortgage originators typically work solely on commission, getting paid only if the loan closes.(12)

Dec 8, 2020 — 2. How does a mortgage broker get paid? Mortgage brokers are most often paid by lenders, sometimes by borrowers, but, by law, never both. That (13)

What Is the Average Salary for a Loan Officer Assistant?

There isn't an average salary for a loan officer assistant, as it depends on too many factors from the company where the assistant is employed, if they work hourly or for an annual salary, and experience. According to the BLS, financial clerks who may do similar work as an assistant to a loan officer earn a median salary of $41,520.

How to Be a Top Producing Loan Officer

  • It’s simple really and there’s no secret formula
  • Work hard and close as many loans as possible
  • You can accomplish this by solid networking and putting in the time
  • There’s nothing magical about it, just strong work ethic

While there might be gimmicks and top 10 lists and classes that teach you “how to sell,” it really comes down to hustling. Honestly.

If you’re committed to the business, you can be really successful and earn a ton of money. When I worked for a wholesale lender, there were Account Executives who sat around and complained, and others who just put their heads down and dialed the phone.

That latter group made a lot of money, while the complainers made average salaries and eventually quit. Ultimately, it’s about work ethic and drive.

All the other stuff, like education and the art of selling, will come with experience. You can’t teach someone how to sell in a class, nor can you teach them everything about mortgages in a day or a week.

It takes time and real-life experience to master those things. But without motivation and hard work, it will mean very little.

So if you want to be successful as a loan officer, you need to work hard and network. Don’t be shy, make calls, visit real estate offices and link up with real estate brokers, and eventually it will get easier and easier.

Sure, you might have some nervous calls and meetings early on, but once you gain confidence, it’ll become second nature and pay dividends.

If your loan officer works for a large FDIC bank

Many of the larger, nationally known banks pay their loan officers differently than the smaller mortgage banks/brokers. They will pay the loan officer a base salary and a small bonus amount based on the loan amount, not the total fees on a file.

Or, simply put — if a loan officer helps you with your mortgage and your loan amount is $200,000 and the loan officer is paid “30 bps”, the loan officer would make 30 basis points on $200,000 or $600.

One advantage to working with these loan officers is that they usually have a large brand behind them — so you have probably “heard of” the lender that they work for. Another advantage to working with these loan officers is that often times, their lender will be willing to “originate at a loss” mortgage loans so that they will have the ability to cross-sell a checking account, savings account, credit card or other bank-related products.

One disadvantage to working with a loan officer who works for a large FDIC bank is that they usually have relatively little rate and fee flexibility. Their rates and fee structures by and large “are what they are.”

Education Requirements

Loan originators usually hold a bachelors degree and have a strong understanding of business accounting and finance. The BLS does note, however, that individuals who don’t have a four-year degree may still be able to become loan officers if they have work experience in banking, customer service or sales. Mortgage officers must also obtain a license to practice. The licensing process requires 20 hours of coursework, passing a licensing exam and submitting to a criminal background check.

Compensation for mortgage officers can be based on commission, salary, or a combination of the two. BLS statistics show that, as of May 2017, the median average salary for mortgage loan originators was $64,660. This means that 50 percent of loan officers made more than this amount and the other half made less. The bottom 10 percent of earners made less than $32,670 annually and the top 10 percent earned more than $135,590.

Industry

According to the BLS, loan officers typically work from offices, either in bank branches or other professional facilities. However, they may have to commute regularly to meet with clients elsewhere. Most work full-time.

5. You can do better

We’ve established four reasons why it’s bulls#!t for you to get stuck with higher rates and origination fees to effectively pay for loan officer commission. But the very best reason is — you don’t have to.

You can choose to work with Better Mortgage. We have industry-leading rates. We don’t charge origination fees. And our loan officers don’t get paid commission, ever.

As a Better Mortgage borrower, you can complete your entire digital mortgage process online. You have direct access to our systems, which:

  • Match you to the largest mortgage end investors in the world (including Fannie Mae).
  • Find the best mortgage at the lowest rate for your specific situation.
  • Guide you through the application process with 100% transparency.

Our loan officers are here to support you with any questions or concerns you may have (which is what humans are actually good at). But they don’t get paid commission. You deserve better than that.

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  1. Frey, Carl Benedikt and Osborne, Michael A. (2013), “The Future of Employment: How Susceptible Are Jobs to Computerisation?”

  2. Philippon, Thomas, “Finance vs. Wal-Mart: Why are Financial Services so Expensive?”

  3. Bogle, John (2016), “The Index Mutual Fund: 40 Years of Growth, Change, and Challenge”

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