What type of education does a loan officer need?

While there are federal and state-specific requirements you need, loan officer education comes in many forms. Here is everything you need to know

What type of education does a loan officer need?

Becoming a mortgage loan officer (MLO) is an exciting career path. MLOs have flexibility, limitless earning potential, and growth.

There are also numerous ways that you can enter a career path as a loan officer. One is by working your way up through smaller lenders, another is by earning a college degree. While there are certain federal and state-specific licenses and certificates that are required to work in the mortgage industry, loan officer education beyond that can come in many forms.

Here is everything you need to know.

Loan officer education: What is a mortgage loan officer?

A mortgage loan officer is a financial professional who helps clients get home loans to purchase property. One of the more significant roles a mortgage loan officer plays is to review their clients’ credit to determine how much money they may be eligible to borrow from a mortgage lender. For example, many first-time homebuyers will consult a mortgage loan officer before submitting an offer on a home.

Mortgage loan officers also provide information on the different types of home loans and interest rates. These financial professionals, who usually work for banks and mortgage companies, provide guidance and advice on home loans.

Loan officer education: What does a mortgage loan officer do?

Mortgage loan officers focus almost exclusively on real estate loans for their clients, which can be individuals or businesses. Mortgage loan officers work for mortgage brokers, credit unions, commercial banks, or mortgage companies.

The primary responsibilities of a mortgage loan officer include the following:

  • Nurture relationships with real estate companies
  • Assess the credit of potential borrowers
  • Review loan options with potential borrowers
  • Ensure that loan agreements meet state and federal regulations
  • Keep records of loan applications and mortgage deals
  • Work with underwriters to determine risks to potential borrowers
  • Coordinate with appraisers to get an accurate market value for a home

Find out more about what a loan officer does and the basics of loan officer training.

What is the best loan officer education?

As a mortgage loan officer, you will review loan applications from clients. You hold appointments with prospective clients and discuss their need for a home loan. You also evaluate their financial information, including credit history and pay stubs, to determine their ability to repay the loan.

Because you must assist clients with any questions they have about the loan process, you should be knowledgeable about different loan types and rates. You also need to ensure the loan meets federal and state guidelines.

Loan officer education: Do you need a degree?

To gain this knowledge, you do not necessarily need a degree—although a degree would be helpful (more on the specific degree below).

If you want to work for a smaller mortgage lender or financial institution, you usually have to be at least 18 years old and have a high school diploma.

Before you apply, check the educational requirements of the job posting to see if you qualify. For the right candidate, some lenders may be willing to give on-the-job training. Larger financial institutions, however, usually require that you have at least a bachelor’s degree in a related field.

If you do not have a degree, you can gain experience by securing employment in the mortgage industry and work your way up to the role of loan officer. Entry-level positions like teller in a bank or credit union, for example, are great ways to get on-the-job experience that will enhance your resume. This will give you the chance to shadow a loan officer to learn what the job entails.

Loan officer education: What type of degree should you get?

As we have seen, a degree is not totally necessary for a job as a mortgage loan officer with most smaller lenders. If, however, you do decide to earn a degree for your loan officer career, majoring in areas like finance, accounting, business, or economics will likely be the most beneficial. Not only will it help you in landing an interview, but having a four-year degree will also help you perform your daily tasks.

Earning a degree in the financial sphere will help you answer client’s questions about loans. After all, it provides you with financial knowledge that will help you explain to your clients—which is a major plus.

Loan officer education: What licensure or certifications do you need?

The licensure and certification requirements for mortgage loan officers are different from state to state. To work with mortgages, you must also meet federal guidelines. This requires that mortgage loan officers obtain Mortgage Loan Originator (MLO) licenses from their state, as well as register with the National Mortgage Licensing Service (NMLS). To get a license, you will need to complete coursework, pass an exam, and pass a background and credit check.

Additionally, OnCourse Learning, in partnership with Mortgage Champions, offers a licensed training program designed for mortgage professionals. The program is a way to train and certify both newly hired and veteran employees.

The offering provides a shared library made up of OnCourse Learning’s catalog of mortgage licensing, compliance, and continuing education training. It also includes Mortgage Champion’s training for leadership, sales, refinances, and purchases.

There are other loan certifications that are quite common. While these certificates aren’t specific to the mortgage industry, they will enhance your expertise. They include the following:

Certified Financial Marketing Professional (CFMP)

A Certified Financial Marketing Professional (CFMP) is a designation earned by marketing professionals in the finance sector. The CFMP was created by the American Bankers Association (ABA), the largest banking trade association in the USA. This designation will exhibit your knowledge base and level of expertise in the financial marketing arena. If you earn the CFMP certification, you will also gain access to the ABA’s continuing education (CE) database.

To obtain the CFMP, you must submit an application and fees for the exam. You must pass the CFMP exam and meet all other eligibility requirements. These include having three years minimum experience in financial services marketing or a baccalaureate degree in economics, business, or marketing-related major. Otherwise, you must have five years of professional marketing experience, including a minimum of three years in financial services marketing.

Certified Trust and Financial Advisor (CTFA)

Also offered through the ABA, the Certified Trust and Fiduciary Advisor (CTFA) is a designation that provides training and knowledge in estates, taxes, investments, financial planning, and trusts. The CTFA credential is best for professionals who have a career in brokering, banking, financial planning, taxation, or trust administration.

Loan officer education: How do I start being a loan officer?

To become a licensed mortgage loan officer, you must complete a few steps. First, you must register with the National Mortgage Licensing System and Registry (NMLS). Next, you will have to successfully complete 20 hours of pre-licensure education courses and pass the NMLS mortgage license exam. Finally, you will have to complete any other requirements as determined by your state. (State-specific requirements vary.)

After fulfilling those requirements, expertise is usually established on the job. A great way to set yourself up for success in your career is to join an independent, or smaller, mortgage broker shop.

If you are just breaking into the mortgage industry, you can also apply for a position as a loan officer assistant. This will help you to better learn the mortgage loan origination process and also value experience prior to completing your license requirements.

Further your loan officer education could help you land your dream job.

Further your loan officer education could help you land your dream job.

If you’re interested to find out more, here’s how to become a mortgage loan officer in 10 steps.

Loan officer education: Closing thoughts

Mortgage loan officers are essential to the mortgage industry, helping families and business owners along their way to purchasing the property that will make their dreams come true. Not to mention initiating fee-based mortgages that earn significant revenue for financial institutions. While there are stresses that come with the job, there are also many perks and benefits.

Before launching out on your career path, you must get your loan officer education. To work in the mortgage industry, you will need to register with the NMLS and earn a state-specific licensing. There are numerous ways to further your education and expertise, both while on the job or through certifications and licensures. Read our article on continuing education for mortgage professionals for some ideas.

If you're truly interested in becoming a mortgage loan officer, take the time to look at the mortgage professionals we highlight in our Best of Mortgage section. Here you will find the top performing mortgage professionals, including mortgage loan officers, across USA.

Have experience furthering your loan officer education? Let us know in the comment section below.