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Loan Officer Salary: How Much Can You Make?

Loan Officer Salary: How Much Can You Make?

Every day, thousands of real estate transactions occur. But have you ever thought about how that’s happening?

Loan officers are hard at work making loans to qualified buyers. And for this, they are handsomely compensated.

Read on to learn about loan officer salaries and how to maximize earnings.

How Much Do Loan Officers Make?

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A loan officer is tasked with helping borrowers find the right loan, establish a payment schedule, and ensure they are able to repay the loan.

While this may be a stressful job, a loan officer has the potential to make a lot of money. In addition to their salary, loan officers have a variety of incentives that allow them to earn additional compensation.

Loan officer salaries vary by career path, but hard work is typically rewarded. According to Indeed, the average loan officer salary is $74,150, with $38,300 of this in the form of commissions.

However, a CNN Money report determines the average loan officer salary is $64,660, with a large range between the high and low sides.


Not surprisingly, loan officers make the most on the East Coast. This results from higher property values (and therefore higher loan origination fees) and higher base salaries to offset the higher cost of living.

New York$108,410
District of Columbia$104,960
New Hampshire$90,720

In this post, we will explain how a loan officer makes money, the educational requirements for becoming a loan officer, and career advancement in this profession.

Mortgage Broker Salaries

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Many loan officers work for a mortgage broker or mortgage bank. The vast majority of these officers receive a straight commission. There are different compensation plans, but categorizing all of them isn’t possible.

Instead, we’ll focus on the officers working for a mortgage broker or mortgage bank. Under this compensation plan, the officer receives a percentage of the revenue generated on the loan.

Suppose a loan officer helps a client with the mortgage. The total fees, including the yield spread premium, add up to $10,000, and the loan officer is on a 60 percent split. They then stand to make 60 percent of $10,000, or $6,000.

Borrowers get two advantages from working with these loan officers. First, the officer has access to many lenders, so they aren’t required to sell only one lender’s products.

This means that the borrower has different rates and terms to choose from. Another advantage of working with these loan officers is that fees are more flexible.

Mortgage bankers and brokers have access to a variety of lenders. You have more chances of finding the lowest rate and lowest fee with them, right?

This might not always be the case. The reason is that these loan officers must always originate the loan at a profit. Alternatively, they must make money from the loan origination process.

Bank Loan Officer Salaries

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Loan officers working for larger, well-known banks are paid differently than those who work for smaller mortgage brokers or banks.

These banks will pay a base salary to the loan officer and a bonus amount based on the total loan amount instead of the fees on a file.

Suppose a loan officer working for a large bank helps a consumer with their mortgage, and the loan amount comes to $100,000. If the loan officer is paid 25 basis points (bps), they would make 25 bps on $100,000, or $250.

Working with loan officers who work for a large bank has two advantages. The first is that they have a well-known name behind them. The second is that the lenders of these loan officers are often willing to originate a loan at a loss.

The disadvantage of working with loan officers who work for large banks is that they usually don’t have much flexibility when it comes to rates and fees.

Loan Officer Education Requirements

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One of the most interesting things about the loan officer career is that even a person who doesn’t have any experience can become a loan officer. A high-paying job that welcomes newbies is hard to find.

In fact, certain mortgage lenders and brokers will hire a loan officer even if they don’t have a high school diploma or a bachelor’s degree.

This means that you can become a loan officer even if you didn’t do great at school or weren’t fond of learning.

However, larger financial institutions will likely look for a college degree if the candidate doesn’t have any experience.

When it comes to licensing, it typically depends on the company, state, and specific position. These days, many loan officers are required to be licensed.

But there are still positions at banks where a Mortgage Loan Originator (MLO) license isn’t required.

Even if a person does have to be licensed to become a loan officer, it isn’t a big deal. In the majority of cases, they only need to take 20 hours of coursework, pass an exam, and complete 8 hours of continuing education every year.

The takeaway from the educational requirement is that getting hired as a loan officer at a retail bank is easier. However, since these loan officers are likely to be less knowledgeable, they are paid less than those working for larger financial institutions.

Make the Most of Your Career

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Loan officers typically stay in just one place and don’t advance within a company. Their status may be changed to “Senior Loan Officer,”  but this doesn’t mean anything. Rather, it just means they have been around for a long time.

Loan officers can, however, advance externally if another company recruits them at a higher commission or base salary.

Those who are able to bring a large number of clients to the business may attract a lot of suitors and may even get a six-figure bonus offer to switch companies.

This means that there are several advancement opportunities for hard-working and successful loan officers.

Is a Loan Officer Salary Worth It?

We have shown you how a loan officer makes money, the education requirements for becoming a loan officer, and career advancement for a loan officer.

Being a loan officer is a lucrative career path with the right structure, relationships, and processing support.

You don’t necessarily need a bachelor’s degree or experience to become a loan officer.

Even if you don’t have a bachelor’s degree or any notable sales experience, a small mortgage broker might still hire you.