Pros and Cons of a Career as a Mortgage Banker
Mortgage bankers are sales-oriented loan officers who work with the financing of all kinds of private properties. If you're wondering if a career as a mortgage banker may be right for you, read on to learn about the pros and cons.
| Pros of a Mortgage Banker Career |
|---|
| Banks may offer incentives such as performance-based pay* |
| Can work in different specializations (residential or commercial lending)* |
| May not need a college degree* |
| Get to travel frequently to meet with potential clients* |
| Cons of a Mortgage Banker Career |
|---|
| Career growth is average (8% from 2012-2022 for all loan officers)* |
| Needed less frequently due to online loan applications* |
| Demand for mortgage officers fluctuates with the economy* |
| May work long hours* |
Source: *U.S. Bureau of Labor Statistics.
Essential Career Information
Job Description and Duties of a Mortgage Banker
Mortgage bankers speak with customers in-person, over the Internet or via telephone to gather information in hopes of originating a loan. They walk candidates through the application process and collect vital financial documents. In underwriting, mortgage bankers determine whether the prospective borrower will be able to repay the loan based on the client's credit history and sometimes other financial information. Mortgage bankers may be involved in trying to collect money from delinquent accounts. They may also counsel mortgage holders on financial matters, such as which type of loan is best for them and the terms of service associated with a loan.
Mortgage Banker Career Prospects and Salary
According to the U.S. Bureau of Labor Statistics (BLS), the employment outlook for loan officers was expected to grow by 8%, about as fast as the national average. The job growth varies with the economy and interest rates. However, many customers are now turning to the Internet for mortgage loans, and this has reduced the need for traditional mortgage bankers. The BLS reported that nearly 300,600 loan officers worked in the U.S. as of May 2014.
In the same year, the median annual salary of a loan officer was $63,000; however, the BLS noted that mortgage bankers could be paid a salary or on commission, or both. The Mortgage Bankers Association also noted that mortgage bankers could receive compensation through origination or service fees, proceeds from the sale of the loan or interest payments.
Education and Training Requirements
Education Requirements
A high school diploma is generally the minimum education needed for a mortgage banker, according to the BLS. However, a college degree may not be necessary for an entry-level job as a mortgage banker, especially for someone who has previous experience in the financial industry or in sales. On-the-job training is common. The BLS noted that commercial mortgage bankers might need a bachelor's degree in a field like business, finance or economics.
Additionally, the BLS states that all mortgage loan officers need a mortgage loan originator license. Depending on the state in which you'll work, you may need to hold a license to work as a mortgage banker. According to the Mortgage Bankers Association, some states license institutions rather than individuals, while others require bankers and, sometimes, support staff to hold individual licensing.
Top Skills for Mortgage Bankers
When the economy shows a demand in lending, mortgage bankers should be able to quickly identify customers who need loans. Good customer service and sales experience are important as well as excellent interpersonal skills when working with customers about their loan application. Mortgage bankers need impressive decision-making skills while working in a fast-paced environment.
Job Postings from Real Employers
Due to the abundance of mortgage banker jobs, employers try to attract mortgage bankers by compensation and benefits packages. Job postings for mortgage bankers show that employees not only need sales experience, but a degree is often preferred. These March 2012 open job samplings illustrate other common job requirements:
- An opening for a mortgage banker at a home loan company in California requires two years of sales or customer service experience; a college degree is preferred, but not required. Weekend work is common.
- A Wisconsin bank looking for a mortgage banker doesn't specify a required experience or educational level, but emphasizes the need for communication and sales skills. This candidate would call potential clients to originate loans.
- A financial services company in Pennsylvania posted an opening for a mortgage banker with at least a high school diploma in addition to sales experience. If hired, you'd be required to maintain a National Mortgage Licensing System registration. The candidate should have work flexibility based on the customer's schedule.
- An opening for a lead-driven mortgage banker at a bank in Georgia requires at least two years of experience. The employer prefers a banker with a bachelor's degree and requires computer system proficiency.
How to Stand Out in the Field
Although many employers provide on-the-job training, having formal education may enhance your job opportunities. Some employers sponsor formal training. The BLS noted that certification, although not required, might improve employment options. After gaining at least three years of experience and working for a Mortgage Bankers Association (MBA)-member company, a mortgage banker can take an exam to become a Residential Certified Mortgage Banker through the MBA.
Knowledge of banking computer software and systems can provide another advantage, since banking is becoming increasingly dependent on technology. Mortgage bankers should be aware of the latest financial products that may be available to their clients. One way to do this is through the MBA's CampusMBA program and other continuing education opportunities it offers. Examples of CampusMBA courses include ethics, fraud detection and process automation.
Other Careers to Consider
Tax Preparer
If a financial career that requires about the same amount of training as becoming a mortgage banker appeals to you, but you'd prefer to be self-employed, you might consider becoming a tax preparer. Tax preparers help complete tax returns and perform other tax-related services for small businesses and individuals. They may review financial statements, calculate taxes overpaid or owed and provide advice based on tax laws. Like mortgage bankers, you can become a tax preparer with a high school diploma, vocational training, on-the-job training or an associate's degree. Per the BLS, the median salary for a tax preparer as of May 2011 was about $32,000. An average job outlook of 10%-19% was projected from 2010-2020 according to the Occupational Information Network (O*NET) OnLine.
Credit Analyst
Are you looking for a career closely related to mortgage banking, but with a higher median salary and job outlook? If so, think about being a credit analyst. Credit analysts research and prepare reports on information related to the creditworthiness of businesses or individuals who apply for loans or credit. The BLS states that you'll probably need a bachelor's degree to begin as a credit analyst. The BLS estimated a 20% job growth from 2010-2020, and as of May 2011, the median salary for credit analysts was about $61,000.
Financial Analyst
Are you willing to invest more time in education in exchange for a higher median salary? With a bachelor's degree in accounting, economics, finance, business or a closely related field, you could become a financial analyst. Financial analysts provide information on stocks and other financial products for individuals and businesses planning to make investments. Typically, they'll either work for companies with money to invest and come up with investment strategies, or they'll assist banks, firms and other dealers in selling their financial products. The BLS projected a faster than average job growth of 23% for financial analysts from 2010-2020. The median annual wage for this career as of May 2011 was about $76,000 per the BLS.
