How to Become a Mortgage Loan Originator

Are you interested in becoming a mortgage loan originator, known in the industry as an MLO? It can be a rather lucrative career—especially for realtors who already help people find homes to buy, and can then provide them with the mortgage assistance they need. Being an MLO is fairly easy once educate yourself on the many mortgage options available, but there is a lot you need to learn, and the career isn’t for everyone.

In today’s post, we’re going to outline the steps you need to take in order to become a licensed MLO. Keep in mind that these requirements vary by state, so be sure to check for additional guidelines depending on where you live.

Step #1: Meet General MLO Requirements

Before we go any further, note that you must be at least 18 years old to become an MLO. Although secondary education and industry experience is not a requirement, a bachelor’s degree and familiarity in finance can help get your foot in the door when entering this career path.

Step #2: Obtain an NMLS Number

The next step is to register with the Nationwide Mortgage Licensing System and Registry (NMLS). This requirement was established by the Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act) of 2008 in response to the housing crisis. The goal was to increase protection for borrowers, many of whom—up until the 2008 crash—received mortgage loans they should have never qualified for.

Additional NMLS requirements under the SAFE Act include:

  • Background check – Applicants must submit their fingerprints for a criminal background check in the FBI database.
  • Credit report – Applicants must have a credit check report run through the NMLS. All licensed loan officers must demonstrate financial responsibility in their credit history.

Step #3: Complete 20 Hours of Education

You’ll then be required to complete 20 hours of NMLS pre-license training through courses approved by the organization. There are two types of loan officers that you can study: residential and commercial MLOs.

While each role preforms the same essential tasks, they differ in the clients and properties they serve. A commercial MLO is for real estate used solely for business purposes. Alternatively, a residential MLO will assist borrowers when purchasing or refinancing a home.

Step #4: Pass the National and State Exam

After completing your educational training, you’ll need to pass an exam to secure your license. The exam has two components: National and State.

  • National NMLS exam – This component of the test costs $110.
  • State NMLS exam – If you plan to practice in more than one state, you’ll need to pass this component for each location, which costs $69.
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