How Does a Mortgage Loan Officer Get Paid?

What is a mortgage loan originator?

Mortgage loan originators, loan processors, and underwriters are all part of a team of mortgage professionals involved in creating a home loan.

One of the most important people in the process is the mortgage loan officer. Or, as they’ve become more commonly known, a mortgage loan originator (MLO).

A mortgage loan originator typically works for a bank or mortgage lender and helps mortgage borrowers in the application process.

A mortgage originator can help you find the right type of loan, as well as the best mortgage terms for you.


Is MLO a 1099?

The CFPB MLO comp rule squelched 1099, and focused on W-2. (And state laws do not supersede a Federal MLO Comp law.) They point to lenders still running some form of net branch operation, which most regulators agree is illegal, and the individual branches are being 1099’d.

8. Average Pay For Mortgage Loan Officer

The average smaller mortgage pays compensation plans would create Aims to waive loan officers make six-figure right after six months of training. Meet.(24)

The average salary for a Mortgage Loan Officer is $49097. Visit PayScale to research mortgage loan officer salaries by city, experience, skill, employer and (25)

Their employers often do not pay them on an hourly basis, If you’re a mortgage loan officer who is not being paid overtime in Connecticut, (26)

Loan Officer Job Prospects

Because many different industries need loan officers, from real estate to banking, jobs are often available. However, according to the U.S. Bureau of Labor Statistics, the job market for loan officers will hold steady in the decade between 2020 to 2030. The BLS reports that approximately 25,000 openings for loan officers are projected each year, on average, over the decade.

These jobs will most likely occur because many loan officers may hit retirement age or leave the labor force for other reasons.

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How long does it take to become a MLO?

The time it takes to become a loan officer depends on what kind of schedule works best for you and how quickly you can work through the licensing requirements. Typically, it takes 45 days to complete the necessary requirements to become a licensed mortgage loan officer.

Highest paying cities for Mortgage Loan Originators in Florida

  1. Pensacola, FL $177,833 per year 8 salaries reported

  2. Jacksonville, FL $161,133 per year 28 salaries reported

  3. Saint Petersburg, FL $155,134 per year 11 salaries reported

  1. Orlando, FL $152,811 per year 51 salaries reported

  2. Maitland, FL $149,838 per year 6 salaries reported

  3. Tampa, FL $140,638 per year 41 salaries reported

  1. Fort Lauderdale, FL $139,562 per year 15 salaries reported

  2. Miami, FL $137,836 per year 38 salaries reported

  3. Boca Raton, FL $106,512 per year 17 salaries reported

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How do mortgage loan officers get paid?

Mortgage originators typically work solely on commission, getting paid only if the loan closes.

This can be a good thing for you as the consumer. This gives loan originators incentive to help an applicant boost his or her chances for approval.

Once a mortgage is approved and the loan funds, the loan originator will receive a percentage of the total loan amount.

The commission percentage that loan officers receive varies from one lending institution to the next. But on average, loan originators receive approximately 1% of the loan amount in commission.

For example, if you are purchasing a $250,000 home and putting 20% down, your loan amount would be $200,000. In this case, the loan officer that helped you get from application to closing might receive a 1% commission of $2,000.

What Do Loan Originators Do?

MLOs will work with you through the steps of getting a mortgage, answering questions, collecting documents and verifying information. If you’re purchasing a home, they’ll also provide an estimate of your loan amount and interest rate based on a review of your income, credit report and assets. This mortgage preapproval can help you figure out your home buying budget and show real estate agents and sellers that you’re willing and able to purchase the home.

The MLO will continue to work with you through the application process, into underwriting and help ensure you’re ready for closing. Remember, an MLO can be a person or institution. While the loan officer is the person who works with you, the lender is the institution that initially funds the loan. A mortgage lender can be a bank or non-bank organization, like Rocket Mortgage®.

What Does a Loan Officer Do on a Daily Basis?

  • Selling is the main focus of a loan officer
  • That means bringing in new customers to apply for home loans
  • Whether it’s a refinance loan or a purchase loan
  • So you can earn a commission when it eventually funds

The broker or bank, or whomever employs the loan officer, may provide sales leads to the loan officer, or they may be completely on their own when it comes to acquiring business, making up their own sales and marketing to pitch potential borrowers.

If you work at a large bank or call center, you may be fortunate enough to just take incoming phone calls.

That means you’ll sit in a cubicle all day and field phone calls. You could also be required to follow-up with customers who expressed interest.

The good part is that you won’t have to find prospects on your own. That can be the hardest part.

If you work for a broker or a small company, you may still be provided with leads, though the quality could be less than desirable. That means you will have to network, make contacts, and market yourself and your services.

This entails trying to get individuals to finance home purchases or refinance their existing mortgages. That’s it. When that happens, you generally get paid.

Often, loan officers will implicitly or explicitly partner with a real estate agent or office so they can provide financing to their home buying prospects.

If you’ve ever purchased a home, you’ve likely had the preferred lender’s contact info thrown your way when it comes time to fill out a loan application.

A loan officer may get these leads and run no-obligation pre-approvals for those clients to win them over. Often, a real estate agent’s recommendation will end up providing financing since borrowers don’t tend to shop around.

In any case, your role as a loan officer is to sell and that’s pretty much it. If I had to sum up a loan officer jobs description, I’d simply say selling.

Sure, you’ll have to put your clients at ease throughout the loan process, and communicate with your staff, but the main objective is sales.

You won’t be doing the loan underwriting, nor will you approve loans that come in the door. That’s not part of your job description.

Loan officers at smaller shops and independent companies need to self-manage their time, and strive to call out up to 100 contacts a day. When demand for loans is low, it can be really tough.

Once a call is successful and a loan officer is able to retrieve a prospective customer’s information, they need to secure financing for their client.

If you work for a broker, you will also need to work with third-party banks and lenders (and Account Executives) to secure financing.

If you work directly for a bank or mortgage lender, you will need to familiarize yourself with the company’s entire product suite so you know what it is you’re selling.

In both situations, your main objective will be to originate loans and assist in processing them, at the same time making sure your borrower is attended to during the entire loan process.

How much should you be earning?

Get an estimated calculation of how much you should be earning and insight into your career options. See more details

Years of Experience

Loan originators can expect to earn more as they gain job experience, however, most do move on to other careers after awhile. A survey by showed the following correlation between years on the job and compensation:

  • 0-5 years: $40,000 
  • 5-10 years: $70,000 
  • 10-20 years: $81,000 
  • 20+ years: $51,000

Mortgage Loan Officer Earning Potential

Your earning potential as a Mortgage Loan Officer can increase as you gain experience and develop your career with additional education. Other factors that will impact your earnings as an MLO include the state in which you do business and the fluctuation of the mortgage market. A whopping 36% of full-time MLOs make above the national average salary, earning up to $181,000 per year. 

With unlimited earning potential and the chance to gain experience and education as you go, becoming a Mortgage Loan Officer can unlock a lucrative and stable career path.

3. The ever-increasing cost of financial intermediaries

Loan officer commissions are a perfect example of a larger, systemic problem of financial intermediation, where banks and financial institutions charge for the service of connecting consumers with their products.

Financial institutions have continued to charge more and more over the last 30+ years, despite technology advances that have drastically increased the efficiency of financial transactions. According to a 2012 paper that examines why financial services are so expensive, the total cost of financial intermediaries is at an all-time high.2

By creating systems to match consumers to the right mortgage products, and providing consumers with direct access to these systems — we can reduce the reliance on costly intermediaries.

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 Are the Highest Paying Cities in the U.S. for Loan Officers?

According to data from ZipRecruiter, the three top-paying cities in the U.S. for loan officers are San Jose, CA, Oakland, CA, and Tanaina, AK.

What about benefits?

MLOs in North Carolina and other states enjoy competitive pay with benefits. Many companies offer full benefits packages, including health insurance, life insurance, retirement plans, and more. Some offer additional perks like commission bonuses, gym memberships, and marketing support.

What Does the Future Hold for Loan Officers

Lastly, let me point out that because of the way t

Lastly, let me point out that because of the way technology is going, the loan officer position might be at risk in the near future.

According to the site, loan officers have a 98% chance of losing their jobs to robots, aka automation.

At the moment, there are around 310,000 loan officers nationwide, and 8% growth is actually expected between now and 2024.

But at some point, they may be phased out thanks to disruptors in the tech and mortgage industry. In fact, we’re already seeing it with companies like 360 Mortgage Group and Homie.

So that’s something to keep in mind as well, though as mentioned, it might be possible to make moves to other related positions that open up as a result of technological advances.


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