How To Become A Loan Officer? Explained In 3 Chapters 

Are you bent on becoming a loan officer? That sounds great – what an excellent career move! You already know that loan officers do earn well. But how to become a loan officer? Or how long does it take to become a loan officer?

And these are genuine queries.

But just to give you an intro, loan officers protect the interests of financial institutions, including banks, by evaluating different risks of lending loans to people applying for the same. As a loan officer, you will also have to review credit reports so that you can match people with different lending alternatives that best suit them.

So, if you want to work with others to improve their lives, becoming a loan officer is ideal. Moreover, working as a loan officer is rewarding and challenging. Plus, you can boost your income while building your experience.

Today, we are here to discuss the 3 most essential steps to becoming a loan officer. We also touch upon how long it will take to complete each step.

Please Note: This blog is based on in-depth research and real-life advice from successful loan officers who have followed all the steps.

Stay tuned.

How To Become A Loan Officer? (At A Glance)

So, how to become a loan officer? There are 3 major steps:

1. Loan Officer Training & Schooling:

This step will cover the expenses and period of finishing your training and education.

2. Loan Officer Examination:

This step covers the time an applicant will take to prepare and eventually pass the Nationwide Mortgage Licensing System (NLMS ) Test.

3. Loan Officer Criminal Background Check:

This step covers the time it will take to do the criminal background check of any applicant.

Chapter 1: Loan Officer Training Programs And Schooling

So, how to become a loan officer? It starts with schooling and training programs. Yes, becoming a successful loan officer involves going beyond your instincts. You need the proper schooling, educational background, training, and licensing to prepare for a lucrative career.

In Chapter 1, we will go through the MLO training and educational requirements, apart from how long it will take you to finish every step.

Keep scrolling!

How Long Does It Take To Finish My MLO Schooling & Training?

Most recruiters typically hire candidates with bachelor?s degrees in accounting, business, or finance. This will take you around 4 years to complete. With a major in any of these areas, you will get the educational background to do your job well.

You must get at least 1 year of internship experience in the financial world next. It is best to do your internship while doing your bachelor?s degree. Moreover, if not a financial internship, you can also settle for something in customer service or sales – small mortgage lending firms will consider this as work experience.

In addition, you can also consider enrolling in an undergraduate certificate program in sales, marketing, or real estate at a community college. This will take between 4 months to a year.

Now, let?s move to the on-the-job training. This is one thing that you need to go through, even if the degree and work experience.

So, your training can vary depending on what company you are choosing to work for. Your MLO training typically will include a blend of company-sponsored programs and self-paced online training. This could take 3 to 6 months to finish after landing the job.

Does It Take Longer To Finish My MLO Schooling in Different States?

To answer your question, technically, yes.

The only difference in time is when you are going through the pre-licensing training period for obtaining your MLO license.

Apart from the compulsory 20-hour SAFE program you have completed in all states, there is extra state-specific coursework.

For example, while you must put in pre-approved coursework worth 2 hours in Florida, you must put in extra pre-licensure coursework worth 3 hours in New York. Then there are states like Virginia and Utah which have no additional requirements.

As a result, the time it will take to finish your prelicensing might differ slightly depending on the state you are planning to do your licensing from.

What Is The Cost to Complete My MLO Training And Schooling In Different States?

On average, your bachelor?s in finance will cost you $50,000. So, you could quickly recuperate a percentage of this cost with your work experience.

Also, your SAFE course of 20 hours will cost you $240 – you need to complete this from an NMLS-recognized school.

Plus, the additional state-specific coursework expenses will vary from state to state. For instance, it will cost you $20 in Connecticut since the coursework spans just an hour. But in Oregon, it will cost you more than $120 for 4 extra hours of coursework.

In addition, the SAFE exam (A.K.A NMLS mortgage licensing exam) will cost you around $110.

Apart from these expenses, there are some related fees, such as:

• an application fee: $300.
• a fingerprint fee: $39.
• a processing fee: $30.
• a credit report fee: $15.

Please Note: Since these fees are standardized in the United States, it doesn?t ideally vary much.

To Recap: Apart from your bachelor?s degree, your NMLS license will cost around $800. That is pretty reasonable, especially considering the 6-figure income you will have even in your initial years as a loan officer.

Chapter 2: Loan Officer Examination

So, you have made it to the second chapter of how to become a loan officer. In Chapter 2, we will talk about getting licensed. Due to a loan officer?s financial responsibilities, passing the NMLS exam is deliberately challenging.

But don?t get demotivated.

The more you spend on studying, the better your chances of cracking the exam – our data says only 54% of participants pass the exam on their first time.

Don?t worry – it is doable!

Stay tuned to read about passing this challenging exam!

Is There A Waiting Period Before You Take The MlO Test?

On a good note, there is no compulsory waiting period for taking this test.

You can take this exam once you finish the SAFE coursework. However, we don?t think that is a good idea. Keep reading to know why.

The other thing to find out here is that on registering for the exam and making the payments, you will have a window of 180 days to sit for the same. Otherwise, you will have to register and pay again.

If candidates fail the exam on their first attempt, they must wait a month before sitting for it again. However, on failing the exam 3 times, the waiting period will extend to 6 months.

How Long Does The Loan Officer Test Take?

You can take the NMLS exam online or in person via Prometric?s testing system.

In the test, you will come across 125 MCQs (multiple choice questions) – out of these 125 questions, 115 are scored, and 10 are unscored pretest questions. You will have to get 75% at least to pass this exam.

Typically, it takes around 2 hours for candidates to finish their exams.

Is There A Time Limit For The Test?

You will get 190 minutes to finish your NMLS exam. So, don?t think about it – if you prepare well for the exam, this is more than enough. 

How Much Time Should I Take To Prepare For The Loan Officer Test?

To break it down, the SAFE course isn?t enough to pass the NMLS test. As a result, it is better not to rush for the exam right after completing the compulsory coursework.

Moreover, once you register for the test, you will get an official MLO Testing Handbook and access the exam outline online. You must also sit for online mock exams and review plenty of practice materials to prepare for the primary test.

We suggest putting in 25 to 35 hours of preparation to study for the exam. It is vital to obtain a comprehensive understanding of what you are reading. Also, remember that memorizing won?t help – you will have more than 4000 questions in the NMLS course database. You cannot be sure which questions will make it to the question paper.

Apart from the rules-based multiple-choice questions related to TILA, HMDA, and RESPA, you will also get situational questions about how these interact.

So, preparing well and in advance to ace the exam is vital. Once you pass the exam, only a few formalities will be left.

Chapter 3: Background Check Requirement

Welcome to the final chapter of becoming a loan officer. Chapter 3 will discuss authorizing a thorough criminal background check through the candidate?s NMLS account.

This step is considered a smart and safe precaution to maintain the credibility of the country?s mortgage system. Moreover, this way, your employers in the future will be able to access your records to verify your profile for a lucrative job.

Please Note: One of the most asked questions on Google about becoming a MLO is, ?Can you become a loan officer with bad credit?? We are about to answer that one – stay tuned!

How Do I Get A Background Check For My Loan Officer License?

Just follow the steps mentioned below to authorize the background check. Going through this simple process from your NMLS account will only take a few minutes.

• Log in to your account.
• After logging in to your NMLS account, you can spot a section saying, ?I am requesting a Federal Criminal Background Check.? – Toggle to this section.
• Now, you will come across opinions asking you to use pending prints, submit new prints, or opt for existing prints (but these cannot be less than three years old).
• Select your option and submit your request.
• If you opt for new prints, you will have another step to schedule your appointment from your account.

How Long Does The CBC Take And How Long To Get Back The Results?

Landing your fingerprint appointment and authorizing your criminal background check is very fast. The results are directly submitted to NMLS, typically within 48 hours after your appointment.

So, this is the easiest part of the whole procedure.

Can You Become A Loan Officer With Bad Credit?

This is the most asked question on Google in this field, and we have the correct answer!

Each US state has guidelines to check an applicant?s credit profile – naturally, some are more restrictive than others.

For example, California?s guidelines are lenient for approving applicants with a bad credit record. But Text is very strict and has even denied a candidate with a good score due to bad credit from several years before.

Ultimately, only the state?s licensing examiner can approve your application or choose to reject the same due to your bad credit.

But in most cases, the answer is usually ?yes!? – you can become a loan officer with a low score.

States don?t usually care about your score as much as they do about background reports. Is there anything derogatory on your records, such as late payments, serious foreclosures, or delinquency? Such a report can seriously pose a risk to your credit report.

Moreover, when you apply to become a loan officer, the NMLS immediately gets hold of your credit report. Now, know that it is a soft pull, and you don?t have to think about it impacting your score.

But this report is stored in the NMLS database and state regulators can access it when you apply to become a loan officer. Now, the licensing examiners of the state will go through your report accordingly, determining whether you can meet the financial responsibility standards to get the license.

Please Note: The SAFE Act has no official guidelines or processes that examiners should follow to check your report. The act only enforces that the candidate should have ?demonstrated financial responsibility, character, and general fitness such as to command the confidence of the community.?

Can I Get A Loan Officer License If I Have A Criminal Record?

The law is much more specific for candidates with any criminal record.

So, when applicants submit their fingerprints, they go through an FBI national and state criminal check.

Moreover, the SAFE act also prevents a candidate from getting their MLO license if there?s been a felony on their record in the past 7 years. This also holds if the candidate?s record has any financial services-related felony like theft, check forgery, fraud, or bribery.

This could even lead to a strict license ban forever.

In addition, the SAFE Act also enforced strict standards for preventing the whole mortgage system from being sabotaged by anyone who cannot be honest, fair, or open.

So, if you meet the guidelines and standards set by the SAFE Act and NMLS, nothing will stop you from becoming a mortgage loan officer.

How Long Does It Take For The State To Approve Your MLO License?

At this point, it becomes a speedy process, with most states taking between 8 to 12 weeks to approve your license.

Now, to start practicing under your license legally, you should seek employment in any state-recognized organization. Moreover, this move will inform the federal government of your activities under your employer?s supervision.

How To Become A Loan Officer? Answered!

Well done!

So, you have scrolled till here – that shows your serious commitment to becoming a mortgage loan officer. We wanted to give you one final gift – so you can digest all this information we discussed at length.

Below, you can check out a list of the most crucial steps with how long each step will take to complete before you can obtain your license.

Please Note: These figures can change from state to state. So, use these as a basic standard and perform individual inquiries on your own.

Loan Officer Training And Schooling:

Loan Officer NMLS Exam:

Loan Officer Criminal Background Check:

Just remember that these formalities are a sort of gateway to a lucrative income and a fantastic career that can help you with an early retirement. Sounds great, right? We wish you the best of luck in your road to obtaining an MLO license – we are rooting for your success!

So, do you have any other questions? Just leave them in the comments section below, and we will get back to you as soon as possible.

Cheers!

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