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How to Become a Mortgage Loan Officer – A Step-by-Step Guide

Last updated on October 20, 2022

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You’ve obviously clicked on this article because you want to be a mortgage loan officer…

Aaaand you’re not exactly sure how to go about it.

We super get that!

Articles out there can be confusing and out-dated. And they leave you with more questions than answers.

That’s why we’re putting this out there for you:

To give you that roadmap you need for your first steps into mortgage brokering.

We’re gonna give you enough information to clarify some confusions, but we’ll also streamline the process for you! So that you don’t get lost in details. 

So without further adieu, let’s find out how to become a mortgage broker! 

But! Before We Begin…

To be clear:

The steps listed here are applicable in all states. What you’ll find is a general checklist to guide you.

Loan originators, loan officers, brokers…

There are so many terms out there! And that really adds to the confusion.

We won’t go into definitions here, but this will help:

Mortgage loan originator is the general title over loan officers and brokers.

Not everyone needs a license either. Those who work under federally regulated institutions just need to be federally registered!

So… Let’s get to it!

Become a Licensed Mortgage Loan Originator

Here are the 7 steps to become a mortgage loan officer!

  1. Pass the preliminary requirements
  2. Check your state requirements
  3. Create an NMLS account
  4. Take a pre-licensure course
  5. Pass the SAFE MLO exam
  6. Apply for a license
  7. Maintain your license

Let’s take a closer look at each one: 

Step 1: Preliminaries

The mortgage world involves a lot of numbers!

But that doesn’t mean you are required to have a crazy college degree to enter into it. Although, sure, that would be great to have.

If all you have is a high school diploma or an equivalent GED, then you can go straight onto the next step.

Step 2: Check your state requirements.

You can actually do this step with Step 3. But we really just wanted to put it right out there, because we cannot stress this step enough:

Check the mortgage loan officer requirements of the state or states you want licenses for!

That’s right. 

All mortgage licenses are processed and monitored through the NMLS. That’s the Nationwide Multistate Licensing System & Registry. (More about this later!)

But!

Each state has its own set of requirements to be logged into the NMLS.

Here are some quick examples of how states can differ:

  • Some states require a few years of related work experience before applying for a license.
  • Some states require a brick-and-mortar office, while others allow a work-from-home setup.

We hope that’s enough to get the idea across that this step is really important.

Knowing your state’s requirements ahead of time will play a huge role in your planning. It might also save you a lot of time!

Don’t worry if these requirements confuse you. Spoiler alert, there are schools and people happy to help you along the way.

More on that in a later step.

But hold on a moment!

You might be someone already in a mortgage company willing to sponsor you.

In that case, your company might initiate the license application for you. It might cover your test fees and bonds, too. That all depends on your agreement.

Even if that’s the case, reading the steps for an individual will help you know just what’s going on!

Step 3: Create an NMLS account.

The NMLS is the nationwide portal that processes and monitors all mortgage licenses. That goes from individuals to companies.

(Check out the NMLS website! It is chock-full of information and guides – like the specific state requirements of Step 2!)

Your first official step into your mortgage loan officer dreams will have to be here:

Create an individual account with NMLS

  • Request an individual account.
  • Provide your full legal name and your email address.
  • Type in your Social Security Number. (Contact the NMLS Call Center for guidance if you don’t have one.)

Once you do this, you’ll be emailed an Individual ID Number.

Keep this number! You’ll be needing it for a LOT of things!

This number will always be attached to you and will not change. 

What does this mean for you:

  • All your future mortgage movement is credited to your account through this number. That includes education, documentation, work history, and licenses.
  • You can give future employers access to your record to vouch for you.
  • Prospective clients can look up your work history and credentials.

Step 4: Take a pre-licensure course.

Before anything else – time for some education!

The Secure and Fair Enforcement (SAFE) for Mortgage Licensing Act of 2008 demands 20 hours of pre-licensure education.

Go ahead and use the NMLS to check out approved course providers for your state or states.

The provider you sign up with will be a great source of mentoring for your license application!

And here your NMLS ID number comes in handy.

Your course provider will need your number to log your credits in your account.

The licensing exam has a reputation of being tough!

So here’s a real tip for you: You should invest in an exam prep afterwards to get you super ready.

Step 5: Pass the SAFE MLO exam.

It’s back to the NMLS again!

Enroll in the most convenient test date for you and pay your test fees. (Or your company can pay that for you.)

Once you’ve enrolled, you have to take the exam within 180 days.

Step 6: Apply for a license.

If you’re at this step, that means you’ve passed the exam!

Woohoo!

Now there’s nothing stopping you from getting your license…..

Except for all the requirements from NMLS.

We’ll list it down for you below… Just don’t let it scare you!

Here we go:

  • Criminal Background Check (e.g. fingerprints)
  • Credit Report
  • Surety Bond
  • MU4 Form

Quick note: These steps can also be initiated by your employing company. 

Step 7: Maintain your license.

The economy changes fast!

That means: The mortgage world puts out new policies to keep up.

So you have to keep up, too!

In fact, the SAFE Act demands it! – A minimum of 8 hours of Continuing Education every year.

Again, this can only be accomplished with the list of approved course providers found in the NMLS.

Conclusion

Becoming a mortgage loan officer takes commitment! But it is also worth it!

We hope the steps excite you!… instead of overwhelm you. 

Remember, they are meant to be taken in just that way – step by step.

You won’t be alone in these steps either. You have mentors to help you throughout – your course provider, company, and more.

Still, having an initial birdseye view of the entire process is definitely helpful!

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