Loans are pivotal for many individuals in every stage of life. Approval for a loan may be a game-changer in accomplishing some of life's big goals, such as buying your first home or expanding your real estate portfolio. One of the most satisfying and financially rewarding job options for ambitious people is becoming a mortgage loan originator because of their vital role in this process.
By now, you're probably wondering whether loan officers make good money. Yes! They do. If you want to enter this industry, here’s what you should know.
What Does a Loan Officer Do?
Aspiring property owners may not always have enough cash to purchase real estate. Applying for a mortgage loan enables them to pay the cost of the property in installments over an extended period. However, this process involves multiple parties, several steps, and a lot of documentation, which can be overwhelming for first-time property buyers. Mortgage loan originators (MLOs), also known as loan officers, make this process more seamless for clients.
MLOs guide clients through the entire mortgage process, from application to approval. They review customer information to determine their eligibility for a loan, submit applications, and monitor their status. To become an MLO, you should complete prelicensure education and any required state-specific courses and pass the SAFE MLO national exam.
How Much Do Loan Officers Get Paid?
So, do loan officers make good money? The short answer is yes. According to industry data, loan officers earned a median salary of $63,380 in 2021. However, this salary can vary depending on location, experience, commission, and other benefits. But for aspiring mortgage loan officers, there are plenty of opportunities for MLOs to make more than the typical salary.
Below, we'll explore the answers to some of the most common questions about an MLO's earning potential.
What's the Salary Range of Entry-Level Loan Officers?
To become an MLO, taking the necessary pre-licensure education and passing the national exam are mandatory. Entry-level loan officers can expect a salary range between $38,301 and $57,001, which is relatively good. However, most MLOs can work their way up to a higher income quickly.
What Is the Highest Salary for a Loan Officer?
In 2021, the highest-paid loan officers earned more than $138,310. High-paying loan officer jobs in 2023 can provide a salary of more than $156,000 per year. Among the states with the highest average salaries for loan officers are:
- New York ($107,770)
- Nevada ($101,690)
- Oregon ($96,340)
- Massachusetts ($95,370)
- New Hampshire ($93,410)
How Do Loan Officers Make Money?
It’s essential to know the different factors that can influence your earning potential in this career and see all possible avenues to increase it. Aside from the salary provided as an employee of a financial institution or private company, MLOs may also enjoy a variety of other incentives to expand their base income. These may include:
- Commission: On top of regular compensation, loan officers can earn commissions based on the number of loans they originate.
- Incentive Programs: Most financial institutions have good incentive programs for performing loan officers, aimed at increasing motivation and improving return on assets (ROA). They may also offer referral incentives for loan officers who provide referrals but don't originate the loan themselves.
- Front- or Backend Compensation: MLOs are either paid by the borrower (front end) in the initial stages of the loan application for their services or paid by the lender (backend) who is selling the loan to the borrower.
- Benefits: Full-time working MLOs also receive standard benefits. Depending on the company, these may include health, vacation, and retirement benefits.
The earning potential of a mortgage loan officer can increase as you progress in your career and improve your skills. Some factors influencing your salary potential include your education, additional training, region, and chosen company.
How Can I Increase My Potential Earnings as an MLO?
The mortgage industry is highly regulated to ensure fairness and protect the rights of consumers. Therefore, it is critical to comply with prerequisite licensure requirements and pass the MLO national exam. Doing so will give you a good headstart and a competitive edge when entering the industry.
As MLOs earn more experience and get better at what they do, they tend to attract more clients, close more deals, and take on more roles and responsibilities, which means they make more money.
Start Building a Lucrative MLO Career Today
So now that you know that loan officers make good money, maybe you’re considering this career path. Becoming a mortgage loan officer is indeed a fulfilling and lucrative career, and those willing to put in the effort can enjoy growth and plenty of opportunities in the industry.
Mortgage Educators is your best online resource for getting started in this field. For aspiring MLOs, we offer state-specific mortgage loan originator license courses to help you get your license quickly and efficiently. Reach out today to get started!