12 Steps How to Become A Loan Officer

(doylc.com) How to Become A Loan Officer - When an individual or business needs a loan, they speak to a loan officer at a financial institution such as a bank, credit union, or loan company — who will help them complete the application and gather information that will determine if the loan is likely to be repaid. As you can imagine, loan officers are an important part of everyday business life and are therefore in high demand. However, becoming one is not necessarily easy and requires good financial judgment derived from on-the-job education and training.

• How To Create Credentials A Loan Officer

1. Research the job. Before you decide that a loan officer is the right job for you, research the field using online resources, particularly those that specialize in jobs such as the Bureau of Labor Statistics at http://www.bls. gov/ applications for auto, home, and tuition, help determine the best loan available and make you aware of the various requirements. Although most work for banks or other lending and financial institutions, some work independently with clients and companies.

Your responsibilities as a loan officer include processing applications and ensuring that information is complete and correct. Based on the data analysis, you determine whether a customer is creditworthy, whether he will grant a loan and if so, on what terms the loan is granted.

Some loan officers are highly specialized. You can deal in consumer loans to individuals, commercial loans to businesses, mortgage loans for real estate, or loan collections. Some loan officers also travel extensively to meet with clients at businesses or in their homes.

The median salary for loan officers in 2012 was $59,280. Some are paid a regular salary, while others are paid on a commission basis, with client volume dependent on the overall strength of the economy. Many mortgage loan officers also have to work long hours.

2. Graduate from high school. While most loan officers have college degrees, it's still possible to become one with just a high school education and on-the-job training. However, you need at least a high school diploma. If you're trying to enter the field, make sure you complete your secondary education and take whatever math, business, business, and computer courses are available to you. These courses are suitable for further education and for your tasks at work.

3. Complete a 4-year degree. Especially for more complex commercial loans, employers require officials to have a college degree in finance, economics, business administration, or a closely related subject. Plan to pursue a bachelor's degree in one of these fields, as it will provide you with the tools you need to analyze finances, read financial statements, and understand the basics of business accounting and cash flow analysis.

Take courses in subjects such as accounting, mathematics, economics and business statistics. An increasing number of financial institutions are now using underwriting software, so being familiar with computers and financial software is also useful.

4. Develop the right skills for the job. Because they work so closely with clients, employers prefer loan officers with sales skills, confidence, and strong interpersonal communication. Work hard to improve your skills in these areas.

For example, mortgage lenders need to develop relationships with real estate developers, property developers, and brokers to increase their referrals. In some cases, you may even contact companies to encourage loan applications. To be an effective loan officer, you must also be able to clearly answer customer questions and guide them through the application process.

Take advantage of opportunities in school to develop the right skills. Courses in psychology, public speaking, and communication can all help.

Practice public speaking. As a loan officer, you don't give speeches, but you do talk to clients and you need a lot of confidence. Public speaking does just that. Spend some time in front of a mirror each week. For example, give a sales pitch. Rate and repeat. You can also join an organization like Toastmasters International to get more feedback.

• How To Get a Foot in The Door

5. Gain experience in the industry. Many banks are happy to hire loan officers with an industry background, especially if the employee does not have a college degree. Some are looking for up to five or more years of experience or the equivalent in a related field. They want to gain as much banking experience as possible. However, a prospective loan officer may also gain the necessary experience in related fields such as customer service or sales.

Keep in mind that banks typically offer some form of on-the-job training to loan officers. If you are hired, you will likely need to complete a mix of company-sponsored training and a few months of informal training.

6. Prepare for a tough schedule. Some loan officers work a standard salaried 40-hour week, but many don't. Your schedule as a loan officer will most likely depend on several factors. On the one hand, the demand for credit is higher in good economic times and when interest rates are low. If you work on a commission basis, you may find that as interest rates rise, you have to put in many more hours to make ends meet.

In general, loan officers are very flexible. Mortgage officers may need to work nights or be prepared to take calls 24 hours a day. Commercial loan officers may also travel to complete loan agreements.

7. Apply for positions. At some point you dare to take the plunge and apply. Keep an eye out for positions. If you're already in banking, let your peers know you're interested in getting into credit. You may be able to find a position at your current position or arrange for an internal transfer. If not, check the listings online on sites like Linkedin or in the classifieds section of your newspaper. Most jobs in the industry will appear in places like banks, credit unions, or lending institutions.

Another option is to become an “independent lender”. This basically means that you are a self-employed loan officer. Don't think this is an easy way. To become one, you must still meet all standard educational and licensing standards and register with the Federal Housing Administration. As an independent broker, you must also insure yourself to protect yourself from mistakes.

8. Specialize in a specific type of loan officer. Loan officers are typically one of three types, working in consumer, commercial, or mortgage lending. How you specialize depends heavily on the institution you work for. For example, some banks make more commercial loans than others. However, if you're carving a niche for yourself, you're focusing your skills on a specific area of ​​expertise.

Consumer loans are granted to private individuals. Think of these as “everyday loans.” A consumer loan officer works with regular bank customers to cover things like car loans, student loans, or home renovation or home improvement loans. Working with backing things like education and home equity loans.

Commercial loan officers work specifically with businesses. A commercial loan officer helps such organizations absorb expenses such as new inventory or equipment, or even expand their business.

The third type of processor, mortgage officers, work with prospective homebuyers. As a mortgage officer, you work more or less exclusively with people who need to borrow to finance homes, buy real estate, or refinance existing mortgages.

9. Get a proper license. In the United States, the federal government requires all mortgage loan officers to be licensed. If you choose to specialize in mortgages, you must complete a minimum of 20 hours of coursework, pass an exam, and undergo background and credit checks.

Note that in addition to federal requirements, laws vary from state to state. For example, in the state of New York, you must complete 20 hours of prelicensing training, which includes 3 hours of state-specific law and 11 hours of continuing education years (with a minimum of 3 hours of state-specific instruction).

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10. Get professional certification. The American Bankers Association and the Mortgage Bankers Association both offer ongoing training and certification programs for loan officers. You don't have to be legally certified. But these programs will improve your qualifications and advancement opportunities. You will take a range of courses to improve your knowledge of banking, credit analysis and mortgage law. You can even choose a program tailored to your credit specialization.

For example, a loan officer can earn a Certified Mortgage Banker (CMB) certificate for residential or commercial purposes through the Mortgage Bankers Association.

The American Banker's Association offers certificates for commercial loans, residential mortgage loans, and another for lending.

11. Take a program in underwriting. Continuing your professional development with a certification course in underwriting will boost your credentials and potential for advancement even further. Underwriting programs are designed for those already in the industry; You'll take courses that improve your understanding of credit risk based on things like property types and values, capital and debt. Two or even four year degree programs are also available.

One skill that underwriting programs teach you is software literacy. While some banks still use established guidelines and human judgment to evaluate loan applications, they are increasingly using specialized underwriting software that rates loan applicants. Knowing about these programs is a great skill to put on your resume.

12. Keep learning. You need to advance professionally to become a great loan officer. Laws change frequently at the state and federal level. You need to keep an eye on these changes. Also, remember that you must complete a minimum number of continuing education hours per year to retain your license. Whether it's for certification, to keep up to date, or simply to educate yourself, it's in your best interest to educate yourself.