Can I Work as a Part-Time Mortgage Loan Originator?

I’m actually surprised by how regularly I encounter new and aspiring mortgage loan originators (MLOs) seeking to enter the residential mortgage industry on a part-time basis.  Although I can completely understand why someone might prefer to dip their toes into the water instead of jumping in all at once, here is why approaching a position as a part-time mortgage loan originator, at least when you’re new, is a recipe for almost certain failure.

Go Big or Go Home

To build a successful mortgage origination business, the newly-licensed loan originator must not only dedicate him or herself to learning all that is needed to become successful, he or she must devote significant time to establishing his or her credibility and earning the trust of referral source partners.  How can someone be expected to appropriately master mortgage product knowledge, underwriting parameters, production systems, origination processes, compliance requirements, attend networking events and open houses, and accompany borrowers to closings without a full-time commitment to becoming the best that he or she can be?

Without question, the mortgage industry offers the potential to earn a very respectable income.  But getting to that point, through building traditional  referral relationships, amassing a clientele that refers new business, and progressing loans through one’s origination pipeline takes time.  Most lenders compensate their originators primarily through commissions.  Some will offer draws against future commissions to those just starting out.  Regardless, I encourage all aspiring mortgage loan originators to devote appropriate thought and consideration to whether pursuing a career in mortgage loan origination is truly the right decision.  Especially considering how bills need to be paid and food needs to find its way to the dining room table now.

I’ll Just Originate Part Time And Keep My Primary Job Until Things Take Off

Its perfectly logical for the aspiring mortgage loan originator to envision keeping his or her primary job while simultaneously embarking on a part-time mortgage career.  At least until things pick up and he or she can afford to leave his or her current job.  This approach, however, is not likely to prove successful.  Those seeking a mortgage career would be much better served, and would be much more likely to succeed, by committing to the mortgage job on a full-time basis while working a part-time job that’s guaranteed to produce a paycheck.

Borrowers Need Ample Service and Support

Mortgage Loan Originators, especially in the beginning of their career, need to commit to learning the business and establishing themselves as committed and resolute advocates for their customers and referral partners.  A mortgage transaction is one of the most significant financial endeavors upon which a consumer will ever embark.  Borrowers need to feel that their transaction’s quarterback is available to handle surprises and navigate unexpected rapids whenever they’re needed to do so (within reason).  How likely would you be, as a borrower, to engage the services of a mortgage loan originator who may not be available should an issue requiring his or her expertise and attention arise?

Referral Partners Need to Be Able to Count on Their Loan Professionals

It’s 3:30 on a Friday afternoon.  A purchase transaction is scheduled to close first thing Tuesday morning.  The Realtor who referred their buyer to you for financing learns that your borrower (their buyer), has an erroneous credit issue preventing the lender from clearing their loan to close.  Your phone rings and rings only to spill over into voicemail.  Why?  Because you’re occupied with your primary job.  When you finally receive the Realtor’s voicemail and call her back, she is understandably irate because now the weekend has begun and nobody will be able to investigate the credit issue until Monday.  As such, the closing may have to be rescheduled, which may ultimately derail the entire transaction.  What are the chances that you will ever receive another referral from that Realtor or any other real estate professional who she knows?  You’d likely have a better chance of catching a boulder dropped from the top of a skyscraper!  Realtors and real estate agents don’t get paid unless and until their transaction closes.  And if that transaction’s closing is contingent on financing for which you are responsible, if you don’t come through, your Realtor referral partner will not get paid.  Does that clarify why real estate professionals choose their financial partners very carefully?

Employers Need Commitment

If a mortgage lender or broker takes a chance by hiring a newly-licensed mortgage loan professional, that sponsor incurs costs and expends effort through onboarding and training that new employee.  How willing might a company be to devote the time, energy, and resources to train and prepare someone who is not willing or able to dedicate their “all” to their new position?  Although you may find lenders willing to give a newly-licensed MLO a chance on a part-time basis, chances are high that, in that circumstance, the part-time MLO won’t receive the level of training and attention that he or she needs in order to become successful.

Customers, referral sources, and the lenders who employ mortgage loan originators all depend on these important professionals to provide successful residential mortgage financing.  Although it’s perfectly understandable why someone entering the mortgage industry might prefer to begin on a part-time basis, pursuing this approach is far more likely to end in defeat and disappointment.  The mortgage industry presents a wonderful opportunity to earn a respectable income while helping others to fulfill their dream of homeownership.  Without the willingness and commitment to dive in hook, line, and sinker, however, success will likely remain just beyond your reach.