How much do mortgage loan officers make?

What is the Pay by Experience Level for Loan Officers?

Early Career▼ 2%Late Career▲ 31%

An early career Loan Officer with 1-4 years of experience earns an average total compensation (includes tips, bonus, and overtime pay) of JA$966,935 based on 6 salaries. An experienced Loan Officer with 10-19 years of experience earns an average total compensation of JA$1,300,000 based on 8 salaries.

Work Environment About this section

Most loan officers work full time.

Most loan officers work full time.

Loan officers held about 322,100 jobs in 2020. The largest employers of loan officers were as follows:

Credit intermediation and related activities 82%
Management of companies and enterprises 4
Automobile dealers 3

The credit intermediation industry includes commercial banks, savings institutions, and mortgage companies.

Loan officers who specialize in consumer loans usually work in offices. Mortgage and commercial loan officers may work outside the office and meet with clients at their homes or businesses.

Work Schedules

Most loan officers work full time, and some work more than 40 hours per week.

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Loan Officer Career Advancement

  • It’s generally a lateral move from one shop to another based on compensation structure
  • Other than going from say a junior loan officer to a senior loan officer
  • Most LOs just switch companies to get better commissions
  • Though it might be possible to open your own shop or become a sales manager as well

Loan officers generally stay in one place and don’t advance internally within a company.

They may change their status to Senior Loan Officer, but usually it means very little aside from the fact that they’ve been around a little longer than typical loan officers. There could be a bump in compensation levels though.

More likely, loan officers can advance externally if recruited by other companies paying higher commissions, or even a base salary. Or a mega bonus to jump ship.

Those who are able to create and manage a large book of business may wind up with a lot of suitors, and it’s not out of the realm of possibilities to be offered a six-figure bonus to change companies.

Many loan officers also apply for a broker’s license as a means for advancement. And eventually employ their own loan officers, and take a cut off everything they earn.

In that sense, there are a variety of advancement opportunities for successful individuals. It’s also possible to shift to the operations side of things (in a mortgage-related occupation) if you turn out to be not much of a salesperson.

Highest paying cities for Loan Officers in United States

  1. Irvine, CA $233,345 per year 143 salaries reported

  2. San Diego, CA $229,222 per year 168 salaries reported

  3. Dallas, TX $223,351 per year 81 salaries reported

  1. Detroit, MI $222,175 per year 36 salaries reported

  2. Charlotte, NC $218,958 per year 60 salaries reported

  3. Houston, TX $218,841 per year 115 salaries reported

  1. Phoenix, AZ $218,527 per year 119 salaries reported

  2. Scottsdale, AZ $213,912 per year 63 salaries reported

  3. Tampa, FL $212,569 per year 113 salaries reported

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Loan Officer Educational Requirements

  • Depending on where you work you may need to be licensed
  • It may easier to get started at a big bank than a smaller mortgage shop
  • You’ll likely also have to pass a background check and get fingerprinted
  • And potentially complete continuing education

Interestingly, you can become a loan officer with no experience. Yep, it’s a potentially high-paying job that also welcomes newbies.

In fact, mortgage loan officers don’t even need a bachelors degree, let alone a high school diploma to gain employment with certain brokers and mortgage lenders.

With the larger financial institutions, a college degree will likely be obligatory without notable sales experience.

In terms of licensing, it depends on the state, company, and specific position. These days, many loan officers need to be licensed, though there are still many positions at large retail banks that don’t require an MLO license.

However, most MLOs need to be registered, perform a background check, and get fingerprinted. This is to protect the public from unscrupulous individuals working for mortgage companies.

If you do need to be licensed, it’s not the end of the world. In most cases, you simply need to take 20 hours of pre-licensure education, pass a test, and complete eight hours of continuing education annually.

The takeaway is that it might be easier to get a job at a retail bank, but these loan officers may be less knowledgeable as a result, and they could be lower paying jobs.

Of course, they may also be the ones that tend to work in call centers and simply plug in numbers into a loan application, as opposed to coming up with creative loan solutions. So they may not need to know very much.

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.

Education Requirements

Loan originators usually hold a bachelors degree and have a strong understanding of business accounting and finance. The BLS does note, however, that individuals who don’t have a four-year degree may still be able to become loan officers if they have work experience in banking, customer service or sales. Mortgage officers must also obtain a license to practice. The licensing process requires 20 hours of coursework, passing a licensing exam and submitting to a criminal background check.

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 salary for mortgage loan originators was $64,660. This means that 50 percent of loan officers made more than this amount and the other half made less. The bottom 10 percent of earners made less than $32,670 annually and the top 10 percent earned more than $135,590.

Industry

According to the BLS, loan officers typically work from offices, either in bank branches or other professional facilities. However, they may have to commute regularly to meet with clients elsewhere. Most work full-time.

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.

4. Financial intermediation might not even be a good option

Unrelated to mortgages, the investment management industry has an interesting example of how getting rid of financial intermediation might be best for everyone. “Index funds” automatically track and invest in markets, as opposed to using the traditional model of human fund managers being paid to actively choose investments.

As a result, not only do index funds cost significantly less — they usually outperform their human-managed counterparts, according to the SPIVA. In fact, this fund management strategy has been so successful that index funds have grown to account for 34% of market share.3

This example of index funds is a good reminder that consumers might benefit from other “disintermediated” financial services (such as mortgages), as well.

2. The best tools for the job

While technology has made financial services more efficient overall, mortgage banks in particular haven’t kept pace. What other reason could there be why so many lenders rely on physical paper and fax machines to share information?

Using antiquated tools is not only slow and annoying, it’s also a failure to use the best tools for the job. Making even a single loan involves handling huge amounts of data, performing complex calculations, and validating thousands of rules. Compared to human loan officers, computers are orders of magnitude faster, more accurate, and more efficient at doing these things.

A 2013 Oxford economic study of jobs susceptible to automation determined that the traditional role played by loan officers has a 98% likelihood of being replaced by computers.1

We don’t fully agree that loan officer jobs should be automated. We believe:

  • Computer systems should do the calculations.
  • Borrowers should have direct, transparent access to these systems.
  • Human loan officers should be available to offer support and expert guidance to borrowers — provided they aren’t being paid commission that skews their interests.
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