How much commission does a mortgage broker make?

Loan Officer Salaries

The median annual wage for a loan officer in 2020 is $63,960. The lowest 10% of wage earners in this field earn a yearly salary of just under $32,820, but earners in the top 10% earn an average salary of over $132,290.

Wages vary based on the employer as well as job performance. Some loan officers are paid a flat salary or an hourly rate, but others earn commission on top of their regular compensation. Commissions are based on the number of loans these professionals originate or on how their loans are repaid.

2. How Much Do Loan Officers Make?

Feb 22, 2021 — The income of a loan officer depends largely on whether their employer pays a flat salary or has a commission-based structure in place. As a (4)

5 days ago — Most mortgage loan originators receive a commission on the loans they originate. The size of the commission and how it is calculated differs Do mortgage loan originators receive a commission?How much do similar professions to mortgage loan originator get paid?(5)

Feb 28, 2009 — For loan officers who work at mortgage banks (also sometimes referred to as “correspondent lenders”) or mortgage brokers, the vast majority of (6)

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How to Be a Top Producing Loan Officer

  • It’s simple really and there’s no secret formula
  • Work hard and close as many loans as possible
  • You can accomplish this by solid networking and putting in the time
  • There’s nothing magical about it, just strong work ethic

While there might be gimmicks and top 10 lists and classes that teach you “how to sell,” it really comes down to hustling. Honestly.

If you’re committed to the business, you can be really successful and earn a ton of money. When I worked for a wholesale lender, there were Account Executives who sat around and complained, and others who just put their heads down and dialed the phone.

That latter group made a lot of money, while the complainers made average salaries and eventually quit. Ultimately, it’s about work ethic and drive.

All the other stuff, like education and the art of selling, will come with experience. You can’t teach someone how to sell in a class, nor can you teach them everything about mortgages in a day or a week.

It takes time and real-life experience to master those things. But without motivation and hard work, it will mean very little.

So if you want to be successful as a loan officer, you need to work hard and network. Don’t be shy, make calls, visit real estate offices and link up with real estate brokers, and eventually it will get easier and easier.

Sure, you might have some nervous calls and meetings early on, but once you gain confidence, it’ll become second nature and pay dividends.

8. Average Pay For Mortgage Loan Officer

The average smaller mortgage pays compensation plans would create Aims to waive loan officers make six-figure right after six months of training. Meet.(24)

The average salary for a Mortgage Loan Officer is $49097. Visit PayScale to research mortgage loan officer salaries by city, experience, skill, employer and (25)

Their employers often do not pay them on an hourly basis, If you’re a mortgage loan officer who is not being paid overtime in Connecticut, (26)

What about benefits?

MLOs in North Carolina and other states enjoy competitive pay with benefits. Many companies offer full benefits packages, including health insurance, life insurance, retirement plans, and more. Some offer additional perks like commission bonuses, gym memberships, and marketing support.

Years of Experience

As you gain experience as a loan officer, you’ll probably also gain more clients. As you gain more clients, you’ll see more money from commissions. Here’s a look at some average salaries you can expect based on your years of experience.

  • Less than 5 years: $40,000
  • 5 to 10 years: $46,000
  • 10 to 20 years: $49,000
  • More than 20 years: $50,000

Loan officers also have the opportunity to move to companies that pay higher commissions as they gain experience.

How Much Does a Loan Officer Make an Hour?

  • Some loan officers are paid hourly if they work at big retail banks
  • And may not actually be paid on their loan volume
  • But many loan officers are paid commission-only in lieu of a base salary
  • Which you can break down into hourly wages at year-end (it may often be much better than a guaranteed hourly wage)

As noted, MLOs are typically not paid hourly, and are instead paid commission for the loans they bring in and fund.

This means total compensation can range significantly based on the sales performance of the loan officer in question. It also depends on how much a loan officer makes per loan.

If the LO works for a small shop and has very little support, they might make a mortgage point or two per loan. By that, I mean 1-2% of the loan amount, which may or may not be split with their broker or mortgage company.

On a $500,000 loan, we’re talking $5,000 – $10,000, less any costs and splits. As you can see, the money can be really good if you’re even mildly successful in this industry, especially if you operate in an expensive region of the country.

Conversely, those who work at big banks and credit unions and are essentially fed a constant stream of clients via walk-ins, incoming phone calls, and the like, may only receive a small commission relative to those going it alone.

For example, we might be talking about 20-30 basis points, or bps, per loan closed. Represented as a fraction, that’s .20% to .30% of the loan amount. Using the same $500,000 loan amount, that’s $1,000 to $1,500 per loan. Still good, but not as lucrative as our earlier example.

However, this latter group might get a small base salary, along with benefits like 401k and insurance and so forth. And as noted, they get leads, which can be huge for the individual who is unable or unwilling to chase after new business.

If you work for a wholesale mortgage lender and are an Account Executive (the LO equivalent), the commission might be even lower, sometimes less than 10 bps per loan.

Lastly, let’s talk about quotas. Sometimes the company you work for will have a monthly quota that must be met to get paid the higher rates of commission.

So if you don’t close X million per month, you might get paid a lot less, possibly just a fixed dollar amount per loan, such as $250 or $500.

Be sure to take a good look at the company’s compensation package so you fully understand all the particulars. And if you don’t, speak up and ask for clarification.

Required Education

Most loan officers need a bachelor’s degree, usually in the field of business or finance. You may be able to become a loan officer without a bachelor’s degree, but you need to have related work experience in sales, customer service or banking.

Mortgage loan officers must have a Mortgage Loan Originator license. This license requires at least 20 hours of coursework, a passing grade on the exam and a background and credit check. You must renew your license every year. Individual states may also have additional requirements.

A number of schools and banking associations offer courses, training programs or training certifications for loan officers. Outside of mortgage loan officers, certification isn’t required, but it shows that you know what you’re talking about when it comes to the job, which may lead to better employment opportunities.

The median annual wage for loan officers is $63,650 according to the United States Department of Labor. The median wage means half the loan officers make less than this amount and half make more.

Loan officers for automobile dealers had the highest compensation with an annual median wage of $85,140, followed by loan officers who work in management of companies and enterprises with a median annual salary of $68,340.

A loan officer’s income depends on their employer. Some are paid a flat salary, while others are paid a base salary plus commission. The amount of your commission depends on the company where you work.

One survey showed that 45 percent of firms paid between 76 basis points to 150 basis points commission on each loan. Each basis point is 1/100th of one percent, so 76 basis points are just over ¾ of one percent. This means on a $100,000 loan, a loan officer would make around $760 commission.

Generally, the more work you have to do to generate clients on your own, the higher your commission. For example, someone who works for a small company with little support may get 1-to-2 percent of the loan amount. Someone else who works for a large company and is given a list of clients to contact might make 20-to-30 basis points or .2-to-.3 percent of the loan amount.

2. The best tools for the job

While technology has made financial services more efficient overall, mortgage banks in particular haven’t kept pace. What other reason could there be why so many lenders rely on physical paper and fax machines to share information?

Using antiquated tools is not only slow and annoying, it’s also a failure to use the best tools for the job. Making even a single loan involves handling huge amounts of data, performing complex calculations, and validating thousands of rules. Compared to human loan officers, computers are orders of magnitude faster, more accurate, and more efficient at doing these things.

A 2013 Oxford economic study of jobs susceptible to automation determined that the traditional role played by loan officers has a 98% likelihood of being replaced by computers.1

We don’t fully agree that loan officer jobs should be automated. We believe:

  • Computer systems should do the calculations.
  • Borrowers should have direct, transparent access to these systems.
  • Human loan officers should be available to offer support and expert guidance to borrowers — provided they aren’t being paid commission that skews their interests.
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What Are the Highest Paying Cities in the U.S. for Loan Officers?

According to data from ZipRecruiter, the three top-paying cities in the U.S. for loan officers are San Jose, CA, Oakland, CA, and Tanaina, AK.

Do loan officers make a commission?

The income of a loan officer depends largely on whether their employer pays a flat salary or has a commission-based structure in place. As a sales-based role, the general rule is that you can make more commissions in situations in which you're generating your own leads. The difference can range from 0.2% to 2% of the total loan amount, again depending on the employer. Additionally, loan officers can earn incentives for reaching certain thresholds or selling certain products.

Average commission: $24,000 per year

Related: Learn About Being a Loan Officer

If your loan officer works for a large FDIC bank

Many of the larger, nationally known banks pay their loan officers differently than the smaller mortgage banks/brokers. They will pay the loan officer a base salary and a small bonus amount based on the loan amount, not the total fees on a file.

Or, simply put — if a loan officer helps you with your mortgage and your loan amount is $200,000 and the loan officer is paid “30 bps”, the loan officer would make 30 basis points on $200,000 or $600.

One advantage to working with these loan officers is that they usually have a large brand behind them — so you have probably “heard of” the lender that they work for. Another advantage to working with these loan officers is that often times, their lender will be willing to “originate at a loss” mortgage loans so that they will have the ability to cross-sell a checking account, savings account, credit card or other bank-related products.

One disadvantage to working with a loan officer who works for a large FDIC bank is that they usually have relatively little rate and fee flexibility. Their rates and fee structures by and large “are what they are.”

5. You can do better

We’ve established four reasons why it’s bulls#!t for you to get stuck with higher rates and origination fees to effectively pay for loan officer commission. But the very best reason is — you don’t have to.

You can choose to work with Better Mortgage. We have industry-leading rates. We don’t charge origination fees. And our loan officers don’t get paid commission, ever.

As a Better Mortgage borrower, you can complete your entire digital mortgage process online. You have direct access to our systems, which:

  • Match you to the largest mortgage end investors in the world (including Fannie Mae).
  • Find the best mortgage at the lowest rate for your specific situation.
  • Guide you through the application process with 100% transparency.

Our loan officers are here to support you with any questions or concerns you may have (which is what humans are actually good at). But they don’t get paid commission. You deserve better than that.

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  1. Frey, Carl Benedikt and Osborne, Michael A. (2013), “The Future of Employment: How Susceptible Are Jobs to Computerisation?”

  2. Philippon, Thomas, “Finance vs. Wal-Mart: Why are Financial Services so Expensive?”

  3. Bogle, John (2016), “The Index Mutual Fund: 40 Years of Growth, Change, and Challenge”

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