A mortgage loan officer typically works with borrowers to help guide them through buying or refinancing a home. If you’re considering becoming a loan officer, you’ll quickly learn that the job isn’t just about numbers—it’s about helping people and being someone they can trust.
Key Takeaways
- Mortgage loan officers usually need to be licensed
- Loan officers need strong communication and sales skills, as well as an ability to assess borrower needs and financial eligibility for loans
- Some companies, including Newrez, have programs to help train potential loan officers that are new to the business
- A bachelor’s degree can be helpful for a loan officer to have, but it is not required
Click to navigate:
1. How to Become a Mortgage Loan Officer
2. The NMLS Mortgage Licensing Exam
3. Education Requirements
4. Company-Sponsored Academies
5. Background and Financial History
6. State-Specific Licensing Requirements
7. What Does a Loan Officer Do?
8. Skills Needed to Become a Loan Officer
9. The Rewards of the Career
How to Become a Mortgage Loan Officer
If you want to break into the business, the most important step for most newcomers is getting your mortgage license. On the federal level, you’ll need to start by getting the Nationwide Multistate Licensing System (NMLS) license.
"Just study for that test because that is your ticket into the industry," advises Jack Butler, a Mortgage Consultant at Newrez. "You can't originate without that license.”
To legally operate as a mortgage loan originator, you must comply with the Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act). This federal law mandates that all state-licensed loan originators complete specific pre-license education and pass a national exam.
A mortgage license may be called something slightly different in each state. For example, in Arizona it is called a “Loan Originator License,” in Arkansas it is called a “Mortgage Loan Officer License,” and in California it is called a “Mortgage Loan Originator License.”
An exception to the rule
You don’t have to be licensed if you are registered with a depository or banking institution.
Steps to get your mortgage license
- Register for a Nationwide Multistate Licensing System (NMLS) number
- Complete at least 20 hours of NMLS-approved pre-licensure education
- Pass the National SAFE Exam
- Pass background and credit checks
- Meet any additional state licensing requirements
The NMLS Mortgage Licensing Exam
After you’ve completed your pre-license education, you can then take the SAFE Mortgage Loan Originator Test.
The exam covers a wide range of mortgage loan topics, including federal mortgage-related laws, general mortgage industry knowledge, mortgage loan origination activities, ethics and specific uniform state content. The test consists of 120 multiple-choice questions, and you’ll need a score of 75% or higher to pass.
Depending on the state in which you plan to operate, you may also need to take state-specific educational hours on top of the federal requirement.
Education Requirements
Outside of the education needed to be licensed, the only educational requirement is technically a high school diploma. Many employers prefer candidates with at least a bachelor’s degree, even if it’s not a strict requirement. Candidates may be able to work as a loan officer if they have relevant experience, an associates degree or a strong sales and finance background.
Company-Sponsored Academies
One of the best ways to complete this education is by finding a mortgage company that sponsors new talent. Some organizations, including Newrez, have dedicated programs to help train potential loan officers who are completely new to the business.
The Academy is Newrez’s development program, which is designed to help early-career professionals become mortgage loan officers. Butler started his loan officer career by joining The Academy. Butler says Newrez provided structured training and resources, but he also studied independently, using videos, practice tests and flashcards to ensure he passed the exam on his first attempt.
Owen Hovick, a Mortgage Consultant at Newrez, started in a business operations support role before joining The Academy and ultimately transitioning to a loan officer role. Hovick said The Academy served as a “door opening to be able to become a loan officer” and that Newrez helped set him up for success when preparing for his licensing exam by giving him a “blueprint” for studying and passing the exam.
Background and Financial History
Because mortgage loan officers handle highly sensitive financial data and facilitate massive monetary transactions, they are heavily scrutinized during the licensing phase. You must be prepared to submit to a comprehensive criminal background check. Certain felony convictions — especially those related to fraud, financial crimes or breach of trust — can permanently disqualify you from obtaining a mortgage license.
Candidates must also authorize an independent credit report. While you do not need perfect credit to become a loan officer, regulatory bodies look for signs of financial irresponsibility, such as outstanding tax liens, judgments or a recent history of severe financial distress, which could indicate a risk to consumers.
State-Specific Licensing Requirements
States may have requirements beyond federal and NMLS licensing. That may include additional pre-licensing education, background checks and passing state-specific exams. You must apply for a license in every individual state where you intend to originate loans. Direct-to-consumer loan officers working in larger call centers might be licensed in dozens of states, while a local retail loan officer might only hold a license in one or two states, depending on what is needed for the role.
What Does a Loan Officer Do?
Loan officers evaluate loan requests and guide borrowers through the lending process from initial conversation to final decision.
Core Loan Officer Responsibilities
They typically:
- Receive and review loan applications
- Speak with applicants about financing goals
- Explain available loan products and terms
- Evaluate income, assets, debts and credit history
- Request and organize supporting documentation
- Identify red flags or missing items early
- Communicate with processors, underwriters and closers
- Keep borrowers updated throughout the process
- Recommend loans based on lender guidelines
- Maintain accurate records and compliant disclosures
Daily Tasks in a Loan Officer Role
A typical day may include reviewing new leads, calling prospective borrowers, analyzing financial information, answering questions about rates and terms, collecting tax returns and bank statements, working with internal teams to clear conditions and preparing files for underwriting review.
Pre-approvals are another key part of the role. This involves identifying the borrower’s goals — such as what they want to purchase — and reviewing their core qualification factors: credit, income and assets.
When not prospecting for new business, loan officers focus on managing their pipeline. This includes following up with clients, checking on file progress and making sure documentation is moving forward smoothly.
No two days are the same. Butler notes that while some days are slower, his goal each day is to “earn new business, [take] new leads, [call] new people, [get] them preapproved [and figure] out what their goals are.”
Skills Needed to Become a Loan Officer
Loan officers succeed when they combine strong financial judgment with thoughtful client-facing communication. Technical knowledge matters, but the best professionals also know how to guide people through a process that can feel high-stakes and confusing.
1. Communication Skills
Loan officers need to be able to explain complex financial concepts in clear, simple language. Borrowers need to understand rates, terms, monthly payments, documentation requests, timelines and possible risks. Strong verbal and written communication help prevent confusion and keeps files moving.
Some documents, such as the initial disclosures, can seem overwhelming to borrowers. “They're going to get this document that's 100 pages. A lot of times, it's a little intimidating and scary,” says Owen Hovick. That’s why he likes to go through documents with clients.
“We’re going to review it together over the phone. So if they have a question...I can go to [the] page...and clearly explain [it] to them.”
2. Customer Service Skills
Borrowers often remember how the process felt as much as the final rate or approval outcome. A skilled loan officer stays responsive, patient, professional and solution-oriented. That is especially important when applications hit delays, documentation issues or underwriting conditions.
“I think you need to be a compassionate individual,” says Hovick. “Sometimes the conversations really can be kind of difficult, but if the person on the phone can understand that you're [advocating for them]... they will trust you more and they'll be open to hear solutions.”
3. Sales and Relationship Management
Loan officers are often responsible for building pipelines and generating business. That means relationship development matters. They build trust with borrowers, maintain relationships with current clients and reach out to or respond to potential new clients.
Butler lists “being responsive” and “always being there for your clients” as two of the key attributes of a successful loan officer.
4. Analytical Skills and Detail Orientation
Loan officers will need to review income sources, liabilities, credit profiles, financial statements and supporting documents. In this career, you’ll need to be able to spot inconsistencies, understand qualification thresholds and recognize what type of loan structure or product will work best for your client.
Loan files are document-heavy and deadline-driven. Missing a pay stub, a signature, a bank statement or a disclosure deadline can slow down the entire process. Loan officers need to be disciplined and able to manage multiple borrowers at once.
The Rewards of the Career
While the path to becoming a mortgage loan officer demands rigorous study, regulatory compliance and a resilient sales mindset, the career can offer meaningful personal and financial rewards.
For many, the compensation structure — which is often heavily commission-based — provides greater earning potential. As Butler puts it, “The harder you work, the more you're able to earn.”
Beyond the financial benefits, there is a deep sense of purpose in helping people achieve the American dream of homeownership. Helping someone secure the keys to their first home is an experience that rarely gets old. "Those are probably my favorite people to help," Butler says of first-time home buyers. "Being able to educate them on the whole process is pretty fulfilling."
Hovick shares a similar perspective: “They're going to trust us with what is probably their biggest transaction in their life. And I'm going to help them to try and attain a certain goal or beat a problem.” He also values the feedback he receives from clients, often through emails or surveys, highlighting the impact of his work.
For those willing to put in the work — from passing the NMLS exams to building strong client relationships — the role can be both lucrative and rewarding.
Equal Employment Opportunity.