Tired of pitching cell phones, furniture or computers? Looking for something that pays better and gets you off your feet? Consider a switch to selling the financing for the biggest-ticket item most people purchase in their lives: Their home.
Mortgage loan officers typically work on commission, so the job comes with a certain amount of risk. When rates drop, the money can be easy. But when rates rise, the demand for loans drops and only the best closers are retained.
Loan officers usually work for a mortgage broker, a mortgage banker or a financial institution, such as a bank or credit union. Most brokerage loan officers are commission-only salespeople. Larger mortgage banks and financial institutions sometimes have salaried loan officers who earn smaller commissions on a per-loan basis.
Whether you're salaried or on commission, you'll be judged by the fee income you earn your company. So the bigger your personal network and the more high-fee loans you close, the more money you will make and the happier your employer will be.
Learning the Ropes
One way to break into mortgage banking is to start out with a lender that trains job seekers with prior experience converting leads to sales, says Meri Miller-Decker, recruiting manager for HomeLoanCenter.com in Irvine, California.
"The way we create entry-level opportunities is to give newcomers a niche [for instance, second loans]," Miller-Decker explains. "They can learn while acclimating to a new company and a new sales position." Once new loan officers learn a niche, they're given more product lines, including home-equity loans, refinancing loans or "sub-prime" loans -- the loans of credit-challenged customers.
Since the demand for loans falls as interest rates rise, it's important for job seekers to ask what a potential employer plans to do to keep business coming in when rates increase. "We've gotten through three significant fluctuations in interest rates, and we've continued to grow," Miller-Decker says. "Sub-prime [lending] doesn't go away and [second mortgages] don't go away. We shift our focus so we're feeding [loan officers] leads that are pertinent to shifts in the market."
Give Them a Grilling
Fred Rizzo, product manager at Home Equity Loan Products Inc. in Kennesaw, Georgia, says job seekers should ask potential employers about training, commission split levels and the fees loan officers must pay out of their split. Also ask about quotas and who pays for any processing. "If you have to go out and contract your own processor, it will cost you per month maybe $1,500 to $2,500," he says.
Other questions to ask a potential employer:
- Does the company supply leads, or is the loan officer expected to do his own marketing?
- If the company supplies leads, where do they come from: radio ads, direct mail, telemarketing, etc.?
- How many leads per week does each loan officer get, and what proportion do the best and worst loan officers close?
- Does the company primarily refinance or purchase loans?
- What loan products does the company have? Does it have sub-prime products (important when rates rise)?
- If the job is 100 percent commission, who pays the FICA, Social Security and income taxes, and what per-loan fees would you have to pay?
Also find out about work hours. Because mortgage lending is a consumer-driven business, loan officers must work whenever people want to get loans. That often means evenings and weekends.
While some mortgage loan officers do earn six-figure salaries, most are mid-five-figure folks. The US Bureau of Labor Statistics reports the median salary for a loan officer was $51,760 in 2006, with the middle 50 percent earning between $37,590 and $73,630. The lowest 10 percent earned less than $29,590, while the top 10 percent earned more than $107,000.
Robert Half International's 2007 Salary Guide found commercial loan officers make more than single-family-home loan officers. Commercial loan officers starting out averaged $46,250 to $70,250; those with more than five years' experience earned up to $102,000.