When you need a loan for your home, car, or college tuition, you would talk with a loan officer to determine if you are an acceptable risk. In terms of buying a home, these professionals assist potential buyers in determining the right loan product for each client and inform them of the different rates, requirements, payment methods, and procedures involved. Loan officers can work in different types of financial institutions such as banks, mortgage companies, or credit unions.
Loan officers spend time either discussing finances with clients or evaluating the documents that clients supply. If this sounds like a career that you are interested in, below are the steps that specify how to become a loan officer.
Step 1: Obtain Post-secondary Education
At a bare minimum, a loan officer must have a high school diploma, but to have a better chance of gaining entry-level employment with the potential for advancement, you should obtain post-secondary education. Generally, this means getting a Bachelor’s degree in economics, finance, or other business-related discipline. You should understand the fundamentals of personal finance, credit, business statistics, accounting, as well as have a good understanding of business and office software. Additionally, courses in communication and business writing would put you ahead of your competition.
Step 2: Gain Related Work Experience
It is one thing to have the right coursework; it is another to be able to apply that knowledge in a real world setting. Therefore, relevant experience is an asset. You can do this through an internship, full- or part-time work in a bank, customer service capacity, or other business finance setting.
Step 3: Complete On-The-Job-Training
Even when you are not working as a loan officer, you should still request to your employer that you receive on-the-job training that will help you towards becoming a loan officer. This can include an informal question-and-answer session from an actual loan officer, receiving company-sponsored education in the necessary skills, or even attending a conference to get an overview of the difference functions related to being a loan officer.
Step 4: Determine Your State Requirements
Every state has its own specific requirements for becoming a loan officer. Review the Nationwide Multi-State Licensing System (NMLS) web site for details about what you need specifically for your state. You will also be able to register for an account, locate courses, sign up for training workshops, and access other resources to help you.
Step 5: Obtain Your License
To work as a loan officer, you must obtain your license as a mortgage loan originator (MLO). To do this, you need to complete 20 hours of required coursework, successfully pass an exam as well as a credit and background check. The MLO exam has both a national and a state component that is specific for each state.
Keep in mind that you will be required to renew your license on a regular basis, which includes registering for continuing education courses and more.
Step 6: Get Optional Certification
Although it is not mandatory, you can increase your chances of how to become a loan officer by obtaining industry-specific certifications. For example, you can study to become a Certified Trust and Financial Advisor (CTFA), Certified Financial Marketing Professional (CFMP), or a Certified Lender Business Banker (CLBB). You will need to indicate that you have the necessary work experience and successfully pass an exam to obtain these certifications.
Your Next Move
How to become a loan officer takes research, dedication, and patience. But if you have knack for both numbers and people, consider becoming a loan officer. You can have the satisfaction of assisting people towards the goal of home ownership while pursuing a strong and rewarding career.