mortgage loan types | mortgage loan process

Welcome to everyone today’s article about

mortgage loan

including the role general timeline

licensing process.

Let me first tell a factual joke, then let’s talk about the article

Just sit with a life insurer for 10 minutes and they will convince you that death is better than life.

and today we will ask some expert

the differences between retail and wholesale

what to expect when you join a mortgage broker shop
and the benefits of working in wholesale.

for both you and your clients for those of you who may be unfamiliar with,

we help connect individuals with professionals who will assist you to become

or join an independent mortgage broker

what is a mortgage loan officer

what’s the process to expect being an independent mortgage loan officer is no doubt a flexible

fulfilling a very rewarding career but everybody needs to know

and understand what the licensing

the process is and what the role of a loan officer looks like beforehand

just so you can all better prepare yourself.

mortgage loan calculator

so first we’ll start off with what is a mortgage loan originator

the mortgage loan officer or mlo is more than someone who just assists borrowers

with obtaining a mortgage as a mlo, you’re representing the

the brokerage you’re working for as well as the borrower that you’re

working with so this means you’re

responsible for protecting the company’s reputation,

whether that’s by maintaining industry

knowledge pro on programs products regulations or just being up and running and high

and tight with what the lending processes are with your company internally and the lenders

that you work with you’re also

responsible for putting your best efforts in to meet your client’s needs you’re going to be

working with potential borrowers to build relationships to essentially

get a better understanding of what their financial situation is

and the needs that they’re trying to meet by obtaining a mortgage or restructuring their current mortgage so that you can qualify them and provide

them with the best options that meet what they’re looking for.

mortgage loan rate of interest

from there you’re going to be responsible for making an application

gathering necessary supporting

documentation and then setting the right

expectations with your borrower and any

third parties involved helping them navigate that mortgage process,

and get them to the finish line,

mortgage loan with bad credit

well some of this might sound very overwhelming

and very complicated it isn’t there is really no shortage of sources for information, or

support in the wholesale channel overall our team at being a mortgage broker as well

as so many other individuals and companies and groups are accessible to

you while you’re getting up and running

but the first step to getting into this business is really getting licensed

mortgage loan pre approval


I’m going to pass things over to sam so our guider can give you an overview of

what the licensing steps are and in which order to take them

thanks, Shelby so there are four main steps to getting licensed

the first step is to go through the pre-licensing education.

so everybody has to take 20 hours of pre-licensing education and then

depending on your state there may be

additional hours so it’s anywhere between two to an additional 15 hours

and again that’s a state requirement so once you’ve completed the 20-hour course

which can be done in person or online um most people choose to do

it online because of the current

the environment we’re in and typically what that looks like is

you pay for it and they load up your account with the modules,

so it’s very much on demand and you can take the course as you choose once you complete

that then you will go ahead and schedule

and take your safe test that’s done at a pro metrics facility

so it’s a monitored facility when you go in they have lockers you can put your

keys your wallet everything.

mortgage loan pre approval

you can’t take anything with you it’s 125 questions

you have 90 minutes to complete it and they score 115 of those questions

you have to pass with a 75 or better in order to be able to get your license it’s a difficult test

it’s got about a 55 pass rate on it so I do recommend taking

some time to study for it and take the practice

questions seriously and utilize the study guides

once you do that it’s about submitting the application which is the mu4 and that’s done through the MLS website

so the nmls is the nationwide multi-site licensing system that houses all things mortgage licensing related so

as you get licensed it’s something you’ll get very familiar with you’ll

complete all of your renewals on that website.

mortgage loan bank of america

and once you complete the application and you’re approved that’s when you’ll

connect back with

and we’ll help you get set up with a local mortgage broker in your area

timeline so you guys know what to expect sam so as sam mentioned the first step

of the licensing process is to start your pre-licensing education

there are plenty of education providers

out there you can seek out in-person classes or online a lot of people

work differently and benefit from each course.

what is mortgage loan originator

course type differently however with things going on right now

we do refer people to a couple different sites that allow you to do it all online whether you’re

going through the 5 days or the 12 days or a different timeline course

when you’re going to purchase the course it gives you an option

you can complete it within a shorter amount of time or a longer amount of time

the education provider that,

we specifically refer individuals to they offer as I mentioned the five and

the twelve-day I always recommend going

with a longer timeline

it doesn’t cost you any more or any less to do one or the other

but the additional timeline the doing the 12-day route

it gives you a buffer so if something pops up in your personal life

or you get hung up on a section of the class you’re just having a little bit of a harder time

understanding and retaining it gives you enough time to where you can get it done

without having to restart

once you complete your pre-licensing education like sam mentioned.

we very very much recommend studying

I usually tell people to take at least a week

in between the time you complete the pre-licensing education

and when you plan to test to just study

you can take your digital flashcards you can find plenty

online from different resources there are additional test prep courses

that you can purchase

the vendor that we again refer you to mortgage educators and compliance

they’re a great company they provide all the test prep material

bundled in with the course when you purchase it so you can do simulated exams

just to get a better understanding and a little more confidence in yourself

before you go to the test so again take that time that full week to go ahead and prepare

this will increase your odds of passing

the exam the first time around

once you pass the exam the next step is for you to reach out to find a mortgage broker

we’ll help you find a brokerage that’ll sponsor your license and submit your mu4 for approval.

we recommend checking back in with us as soon as you complete that exam

so that we can connect you to two to three different brokerages that fit

exactly what you’re looking for and what you need once you

submit your or the next step will be to submit your mu4

and wait for your state approval after

you pass the exam we try to work with

you simultaneously while you’re filing the mu4

and this is just to get ahead of things and help you find a sponsor sooner

and then also assisting you if you need

anything while you’re filing that mu for

the MLS’s website can be a little bit clunky

and sometimes confusing so we are here

as a resource for you for that overall, you should be able to complete

the licensing process from start

to finish with your sponsor and approval within a 30 to 45-day window

again some things pop up in life that might delay you a little bit

but if you’re really on top of everything and moving on to the next step

you should be able to get it done within that window there are some states that

have a little bit of a longer approval turn time get with us again

we could we’ll be more than happy to point in the right direction on what

your state’s specific process and requirements are.

how does mortgage loan work

so the next step once you get your license and you’re approved

and you’re trying to make a decision on a company to join it’s really important

for you to understand the difference

between the two channels and how you operate within each

so there’s retail and wholesale so

retail lending is really your banks, credit unions, or big-name lenders

wholesale is really compiled of independent individuals who have access

and the ability to work with any lender there’s a huge benefit of existing in

the wholesale space for both you,

as a loan officer and your clients your borrowers who you are obtaining a mortgage for

so originating for or being an

independent mortgage brokerage yourself

means that you’re able to take an application you can shop it amongst

any and all the lenders that you work with for the best pricing

interest rates turn time programs experience

everything all together to find the perfect situation and

a program that fits what your clients

needs so essentially you’re a matchmaker

for the home buyers and individuals refinancing

whereas if you’re originating in the retail channel

you’re really simply just qualifying an applicant for financing

that your company offers so this means that if your buyer doesn’t fit the box

for the limited setup programs and guidelines that they offer

whether it’s due to your borrower’s credit score their income or home value

unfortunately, you’re going to have to turn them away because your

the lender your retail lender you work for

just cannot qualify them they

don’t fit in that box so at the end of

the day you’re losing a client and that

client’s not able to get the assistance

they need which is really what’s most important

so as you can see in the wholesale channel the more options you have the

more options your borrower has and this translates to more and faster closings

a better financial situation for your borrowers

and overall a more successful and

rewarding career for yourself

I think really the best part of this presentation

and this webinar is figuring out what to

except when you’re joining a brokerage

and I’m going to pass it over sam so our guider can talk to you guys a little bit about

the expectations that you guys should have going into things

thanks (Shelby) so I think this is like the 800-pound elephant that’s in the

the room you’ve completed all the licensing you’ve gone through the classes you

passed your exam so now what so it’s time to hang your license with a broker shop so a couple

different things you have to start to think about

how are you going to decide who you want

to work with there are thousands of

mortgage brokers nationwide

so you definitely have a lot of different options

and will help to introduce you to several

mortgage broker shops to see you know

who’s going to be a good fit for you

but you should also have a list of must

haves so can I have an idea of what

you’re going to be looking for and

you know you know yourself best so what

do you need to be successful

some things to think about are marketing

do I want a shop that’s going to market

for me or is that something I want to do on my own training do I need more hands-on

the training you know this is

going to be something that’s going to be very new to you so having that training

and that support and what kind of support is there

is it a mentorship program do I have

somebody that I can reach out to all the time to answer questions do

I have a processing team or am I expected to process my own files

Do you know what type of technology is provided you know

I pro-am I paying for the technology myself so you know

the credit report you’re going to have to the technology to be able to pull somebody’s credit

on the loan origination system is what you’re going to use to take

that application so is that provided or

do you have to pay for that on your own

so just a couple of questions to ask

they are about those things

and the brokers are going to interview

you do when we do introduce you to a mortgage broker

they’re going to kind of go through and see if you’re a good fit but you should

also, interview them and see if they’re a good fit for you so

really putting some time into it is really

what I’m emphasizing here you know don’t just talk to one person

and then say that’s a good fit you know

kind of go through a couple and vet some people

and just kind of get an idea of what the

the industry is like so

also, are you coming from a bank you know

is there

do you are you in a related industry where you’re going to be

you already have a book of business

or do you need leads provided you need

help to generate that.

qualifications for mortgage loan

you know so again some things to think

about and that kind of leads me into

the million-dollar question so how does

the loan officer gets paid

so you get paid at the time of closing

and typically you’re going to do a

commission split between

the company and yourself

depending on if they’re providing that

technology the training

the commission set may be a little bit lower or

is that something that you’re all

responsible for so that commission split

might be a little bit higher

Shelby do you have anything to add on

that not really too much just really

piggybacking off of what you’re saying

don’t compromise things that you know

you’re going to need so

don’t feel like you can if a company

doesn’t offer it you love

x y and z about them so maybe you don’t

need virtual training or maybe you don’t need

support with

the learning vendor systems be realistic

and understand that you are going to


help with those things and let that

company know that those are things that

are a requirement for you and if it’s not

something they can provide don’t sacrifice the

six to 12 months that you try to make it work at that brokerage what

our company be a mortgage broker doesn’t

want is we don’t want you to have to move your license multiple times because

you’re just not finding a company that’s

the right fit for you is you’re building a brand in your book a business

for yourself and we want you to be able to find a brokerage that

you’re able to hang your license with

and meets the needs of what you’re looking for long term and that’s really really


important and then also be realistic

about what you’re asking for so

understand like sam mentioned if you’re

asking for a ton of i.t support and providing leads

and whatever else it might be just

understand that there’s a trade-off

there that company is paying for all

those things they’re paying for all the training

they’re paying for the leads and

whatever else they might be provided to you

so just understand that starting out your compensation

isn’t going to be what you saw that one broker in your state

post that they’re making understand that

there is a trade-off there and you have

to be realistic about that but other

than that

I second everything you said sam thank you

um one thing I didn’t mention is 90 of the industry is commission only so i

want you to be aware of that

you know that’s going to be something that um typically you don’t have a

salary to fall back on so just be prepared there may be a little bit of a

ramp-up time for you as you close your first couple deals and start getting that in

but that also leads me to the next slide is you are never alone in this industry

and I think Shelby touched on it a little bit earlier there’s so

much different support out there for you so

you know there’s a lot of examples on your screen right now the association of

independent mortgage experts

they’re champions of the wholesale

channel so um

you know they have their own network of

different companies that can help you

build the business that can help you build

and become successful right off the rip

and they run the brokers are better Facebook page

what I really like about that is there’s thousands of people in that network

what you can do is you can go ahead and

post a question and you’ll get 50 150

responses of your peers that are going through or

have already gone through that same

exact thing

and they can help and guide you through

that so you know those are just a couple


Ellie Mae housing wire magic

constantly putting on webinars for you

to cover different topics

different tasks you know what’s going on

in the industry and they

always have industry experts and they’re

interviewing them and

giving best practices and then there’s

home point uwm I can talk to uwm


we have nine to twelve classes going on

at a time it’s called success track and

you can sign up for them and they’re

completely free for you

you know we have a beginner all class

once you’re done with that you can do an


the class you know if you decide that you

want to open up your shop in 12 to 24

months we have a broker-owner class

and then what’s nice too is every Friday

we do an elective so there might be

income training there might be how to do

a one-touch file on how to process your own

files there’s processor training so

like I said you’re never ever alone in

this industry

there’s a ton of support to help you be

successful and that’s really what our goal is

we want to make sure that you’re

successful right off the bat

I think that kind of takes it all for us.

so let us go through some questions if you have any questions

please type them into this email

but we do have a couple questions here

the first question is

what qualifications does one need to open up

one’s own wholesale broker shop after

passing the safe test and getting a


I’ll take this one sam unless you want to grab it

no that’s okay.

so really you would just need to reach out

to our team and then we have

a list and a good understanding of what

each state’s specific requirements

are um each state is different so some

states require that you have

a certain amount of experience within the last five years

some states have a brick and mortar

a requirement which means you have to have


physical commercial space to

open a brokerage

but outside of that our team really

recommends if you’re new to this

business and

you have not been an originator

previously or

recently we really strongly encourage

you to be selfish with your first at

least your business be selfish and focus

on yourself and building your own book

and brand

and not having to worry about spending

on overhead and other team members so

take that time to hang your license with

another brokerage get up and running

figuring out what systems what companies

you like working with and those that you


and then once you’re comfortable and you

really have it down reaching back out to

our team and then

our other counterparts over here be a

mortgage broker, they can help you really

go over

in great detail what your state’s

requirements are as far as

policies procedures brick and mortar

locations vendor systems and things like that

awesome let’s go over a few more questions

can I be a realtor and a mortgage loan officer on the same transaction

yes you can so we get this a lot of sam and

I oftentimes have people there

I just kind of lose touch with them as far

as contact

and when we finally get them to get back in

touch with them they’re like I’m sorry i


they decided not to do this I’m already

a realtor and you can’t be a realtor and

a mortgage loan officer and we have to

tell them that’s absolutely not correct

so every state allows for that you’re able to be the real estate agent

and the loan originator on the same

transaction um

no matter what the only situation where

you cannot be

on both is an FHA loan so other than

that is completely possible you just need to

make sure that you’re disclosing everything properly

if you’re joining a brokerage the

a brokerage that you’re working for should

have all those

disclosures for you to put in every

application package so it’s not

something you have to worry about

if you are your own broker and you’re looking for information on what disclosures you need you can also reach

out to our team, we’ll put you in touch

with some of our compliance resources

and they can let you know what’s

required to be both on a


great alrighty another question we have is can we originate in multiple states

yup so uh absolutely so that safe exam

that you take

is a nationwide exam in addition to that

you know to get licensed in multiple states you may

have to do whatever they’re required

education is so like I spoke about earlier there may be

an additional two to 15 hours

and then you would just have to file an additional mu4 form

for that specific state so for any state

Do you want to get licensed in

you have to complete the education and

submit that mu4

great let’s see another question we have is

do you need a different license to work

on a commercial mortgage

say that one um so as far as

I’m aware and it really is state

specific again um

in most states, I don’t believe you need

a license to do commercial but Shelby

correct me if I’m wrong on that one

nope you are correct you do not need a commercial

or a license to do commercial lending

you really just need somebody to take

you under their wing and get you up and

running in the business as far as I’m greater um can this be a part-time job

absolutely (Shelby) I’ll take that so

a lot of people get into the industry as

a part-time job and just fall so in love

with it, that becomes their full-time job

because of the flexibility and the

the opportunity there’s really no ceiling to it

but yes you know it’s really is a job that you get what you put into it so

if you’re going to do it part-time

and do you know just one to two loans a month

that’s perfectly fine and then once you

really have the hang of it you can kind

of dive right in

and hopefully, you know you’ll start

doing 10 15 20.

awesome and what are the costs to get


uh so that really depends uh it’s going

to depend on a couple different things

so like we said we recommend

a specific class so you have to pay for the pre-licensing education

that’s going to be anywhere between two to four hundred dollars

again state-specific if you need more education because the state you’re

getting licensed in it does drive that price up a bit once you

complete the pre-licensing education

the class um then you have to take the exam which is 110

and then there is a fee to file the mu4 again that’s the application with the

state and that again is very state-specific

so you’re looking at anywhere between you

know 400 to 1500 depending on which state you’re

located in great

and then the last question we have here is

do I need a certain credit score to get licensed no,

you do not another one we get asked

pretty frequently so if you’re worried about your

credit score or any transactions on your

your credit report what we suggest is reaching out to your

state licensing team directly and again

something you can get in touch with our

team for

but sam and I are more than happy to get you

your state’s licensing team’s

telephone number or

an email address if you’re more comfortable

with that and we always recommend just

telling them exactly what your situation

are they’re going to be the ones that are

approving your application

and they’ll let you know based on your

state-specific requirements whether or

not it’s going to be an issue but

in my experience, I’ve been in this

business for 10 years now

when states are pulling your credit

check or pull your credit history or

background check what they’re looking

for is they’re just trying to make sure


your financial situation or your

the background isn’t in a position where

you might be tempted to commit financial

fraud to better yourself just because

things aren’t really where you want them

to be so

it’s on a case-by-case basis but there

no state is looking for

one set specific credit score

great alrighty everyone well thank you

so much for all the questions

um we will reach out if we didn’t get to

your question as well

but thank you to our panel for sharing

your advice and how to get started in

the wholesale mortgage

the industry as a mortgage loan officer I’m

sure so many of our listeners will be able to take these lessons into their own mortgage career

I know I definitely learned something

today as a reminder if you would like

more information on becoming a mortgage

broker or joining one as a mortgage loan officer

like we talked about today please visit

be a mortgage broker dot com

for more resources to help you make the switch

again thank you to everyone on our panel who joined us

remember you will be receiving an email.

with a webinar on-demand soon

and if you have any questions, please

feel free to email info be a mortgage broker dot com thanks

so much everyone and have a great rest of your day