So you need a job and now you’re thinking about becoming a loan officer?
It’s true, loan officer jobs pay more than most any other occupation out there, assuming you haven’t passed the bar or made your way through medical school.
But it can’t be that easy, could it? To make six figures without a high school diploma, you would think you’d have to invent something or start your own business. But the prospect of being a loan officer has changed conventional thought, especially as the housing market shot off in recent years like a bottle rocket.
So now as we lay in the wake of the housing bubble bust, are loan officers still making money? The answer is a resounding yes, but the numbers of loan officers have probably been cut in half, if not more in the past year or so.
And the quality of mortgage loans at the moment isn’t what is once was a few years ago. It seems most of the smart money already refinanced, or made purchases before values went up. And the only deals around at the moment are tricky and riddled with hurdles.
Being a Loan Officer Can Be Lucrative
But if a loan officer gets just one of those deals to go through, it often equates to a huge payday, sometimes as much as a year’s salary working a minimum wage job or a lower paying occupation.
So that’s the incentive, big money. But there are a number of questions you need to ask yourself before setting out in the mortgage industry as a loan officer.
First and foremost, it is not an easy job. Sure a mortgage broker or bank may say it’s simple. And sure, you may not have to work very hard, or take part in any back-breaking work. But factor in the stress, the near misses, lost deals, and the wheel-spinning and it isn’t as favorable as they may make it out to be.
You will lose deals, and you will waste a lot of time. You will have mental breakdowns as deals fall through your fingers, and brokers and agents scream at you as deadlines close in.
But if you can handle it, being a loan officer can be quite lucrative, and quite easy if you organize yourself.
It’s not for everyone, and there is definitely a lot you need to learn before starting a career in mortgage. And once you get a taste of the money you may have trouble walking away, no matter how high the stress and quality of your life.
All that aside, let’s look at the reality of a loan officers’ duties on a daily basis.
Loan Officer Job Description:
A loan officer typically comes into work at 10am and works until 8pm. The time is structured to work around when companies are allowed to solicit consumers in their homes. The peak hours for sales calls take place in the early evening, between 6pm and 9pm.
The broker or bank, whoever employs the loan officer will provide leads, although the quality is usually less than desirable. Loan officers need to self-manage their time, and strive to call out up to 100 contacts a day. Once a call is successful, and a loan officer is able to retrieve a potential borrower’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 to secure financing.
If you work directly for a bank or mortgage lender, you will need to figure out pricing and financing terms through the company product suite.
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.
Loan Officer Educational Requirements:
Loan officers don’t even need a high school diploma to gain employment with certain brokers and lenders. With the larger financial institutions, a college degree will be obligatory without notable sales experience.
Loan Officer Salary:
Most loan officers do not receive a base salary, only commission, so they are paid for performance. The median income for a loan officer in the United States is around $40,000. The number isn’t high, but it’s skewed by the sheer number of loan officers who do very little, or are simply unsuccessful. Many loan officers can earn up to several hundred thousand dollars a year if they work hard and make the right connections.
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.
Loan officers can advance externally if recruited by other companies paying higher commissions, or even a base salary.
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.
To sum it up, loan officers have the potential to make more money than the majority of the population, including doctors and lawyers. The amount of time and work you put in is paramount, and you must be very driven to excel in the mortgage industry. It can be a very cut-throat field, filled with stress, deadlines, and missed opportunities. Always do plenty of research about the company or broker you decide to work for to ensure you know exactly what and how you will be paid.
The job isn’t for everyone, but if you think you’ve got what it takes, it can be very fruitful and lead to other opportunities such as being a broker, working with a large banking institutions, or working in commercial real estate, just to name a few.