How to become a loan officer in California

Becoming a mortgage loan officer is a promising career path that offers unlimited earning potential, flexibility, and career growth. And this is certainly the case in California. In the Eureka! state, you can make a salary of more than $156,000 in your first couple years alone or earn a commission over more than $56,000 (on average). 

But how do you become a mortgage loan officer (MLO) in California? What are the educational and on-the-job requirements?

In this article, we will answer these questions and more. Here is everything you need to know on how to become a loan officer in California.   

What are the requirements to become a loan officer in California?

To be a mortgage loan officer in California, you will need to complete six steps. Some of these steps include enrolment in California Pre-Licensure Education (PE), completion of background checks, and securing employer sponsorship. Let’s take a quick look at the requirements on how to become a loan officer in California:

• Request an NMLS account
• Finish NMLS-approved pre-licensure education 
• Pass SAFE (Secure and Fair Enforcement Act) mortgage loan officer test
• Complete state/FBI criminal background checks
• Finish NMLS application 
• Get employer sponsorship 

Let’s take a closer look at each of the steps: 

1. Request an NMLS account

Before you start the educational portion of licensing, you must create a Nationwide Multistate Licensing System and Registry (NMLS) account on the State Mortgage Registry website. The NMLS is a nationwide database where all mortgage loan officers in California must register.

After creating your account, you will receive a personal NMLS number you will have for the entire time you are a working mortgage loan officer.

2. Finish NMLS-approved pre-licensure education

In California, you are required to successfully complete 20 hours of coursework to meet the educational requirements.  The state of California has two licensing NMLS agencies:

• The Department of Financial Protection and Innovation (DFPI)
• The Department of Real Estate (DRE)

Each of these agencies requires a different set of pre-licensure education. Here is a breakdown of each:

Department of Financial Protection and Innovation

To meet the educational requirements, you must finish 20 hours of coursework, which includes:

• Federal law: three hours
• Ethics: three hours
• Non-traditional mortgage lending: two hours
• Electives: 10 hours
• California-specific education: two hours

Department of Real Estate

To meet the educational requirements, you must finish 20 hours of coursework, which includes:

• Federal law: three hours
• Ethics: three hours
• Non-traditional mortgage lending: two hours
• Electives: 12 hours

3. Pass SAFE mortgage loan officer test 

You can visit the NMLS website to schedule the SAFE mortgage loan officer test. You can use your existing account number to schedule the test. It has 115 scored questions, and you must answer at least 75% correctly. The test costs $110 to take and you are given three hours and 10 minutes to finish. To learn more about the test, you can review the MLO testing handbook.

4. Complete state/FBI criminal background checks

When applying to become a loan officer in California, you need to log into your NMLS account and visit the “filing” section, then click on the “criminal background check” tab. By clicking attest, you will authorize a Federal Criminal Background Check.

The next step is to schedule an appointment to submit your fingerprints. To begin this part of the process, you need to click on the “composite view” button, then choose “criminal background requests.” You can then schedule your appointment by clicking the “fieldprint” button. These state and FBI criminal background checks cost $36.25 total.

5. Finish NMLS application

This step includes submitting for official California licensure through the NMLS licensing portal. The NMLS application fee is $30, plus you will have to pay $300 for the California portion of the licensing fee. And, for a $15 fee, a credit report must be submitted at the time of the application. For additional information on pricing, you can check out the California MLO license application checklist. The application in California costs $105 total. That includes the cost of the NMLS processing.

6. Get employer sponsorship

Until your employer sponsorship is verified with the NMLS, your California mortgage loan officer license will remain in pending status. The required verification is completed in the NMLS portal. You will then have to visit the form filing home screen and click company access.

At this point, you will be prompted to add your employer sponsorship by submitting employment details. After your sponsoring employer receives notice of the verification request, they can approve your sponsorship. Pending approval, you are officially licensed.

For general guidelines on becoming a loan officer (not just in California), read our article on how to become a mortgage loan officer in 10 steps.

How much does it cost to get your loan officer license in California?

To get your loan officer license in California, you will have to pay a few different fees. When applying through the NMLS licensing portal, you will pay an application fee of $30. You will also be required to pay $300 for the California portion of the licensing fee. On top of these fees, you will have to submit a credit report, which costs $15.

Do you need a degree to be a loan officer in California?

No. You do not need a degree to be a loan officer in California. In fact, there is no requirement for previous education.

After you get hired as a mortgage loan officer in California, you will likely receive on-the-job training. This will be a combination of formal, company-sponsored training and informal training that you undergo during your first few months on the job. Typically, mortgage loan officers—in California or elsewhere—come from a background of customer service or sales and enjoy working with others.

How do loan officers get paid in California?

The average mortgage loan officer in California gets paid a base salary of $183,484 per year, according to Indeed.com. The average commission for a mortgage loan officer in California is $11,750. It should be noted, however, that these figures likely represent top earners. Depending on the job site, MLO officer salaries can range from as little as $41,000 per year to $87,000 per year.

The following chart is a breakdown of salaries by years of experience in California, according to Indeed:

How to become a loan officer in California: commission

Mortgage loan officers in California make an annual commission of $56,000 on average, again according to Indeed.com. But how much does a loan officer in California make per loan? Typically, commissions range from 0.5% to 2.5% of the home loan amount. This is based on the general understanding that you earn more money if you generate your own leads. It is also common for higher commissions to be offered as incentives if the loan officer reaches a monthly quota or sells a premium product.

Here is an example of one Quora user's commission as a mortgage loan officer in California: at a commission of 1.25% for a $400,000 home loan, you can make $5,000 per loan. Typically, even inexperienced loan officers can realistically make two of these types of loans per month, which equates to a monthly commission earning of roughly $10,000.

How to become a loan officer in California: 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.  While there are stresses that come with the job, there are also many perks and benefits.

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 the USA.

Any tips to share on how to become a loan officer in California? Let us know in the comment section below.