How to Originate Mortgage Loans

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Originating mortgage loans can be a very rewarding job. However, many loan officers find themselves without customers. If you are an originator, it is very important that you learn how to get business on a regular basis. The following steps will help you in your quest to be a successful mortgage originator.

How to Originate Mortgage Loans

Make sure you are properly licensed. Depending on your state, you may have to be licensed to originate mortgage loans. The licensing process begins with purchasing an approved study guide and passing a state test if you haven't already. Licensing fees range from $250 to $1,000 depending your state's requirement. Mortgage and real estate licensing is overseen by each state's financial and real estate regulatory agency. To find the proper agency, contact your governor's office. Its personnel will direct you to the appropriate governmental department.

Make your presence known. Most mortgage originators work on commission only. It is not uncommon for loan officers to start at a firm and go 30 to 60 days without being paid. It is, therefore, crucial to get going right out of the gate. This must start with letting those in your market know you are in the business. To begin, simply make a list of everyone you know. A list of 25 to 50 contacts should be easy to create. When you have your list complete, call those contacts. Let them know you are ready to do business. After you have called the contacts on your list, send each one an introductory letter with 5 to 10 business cards. Your letter should be short and to the point. A good introductory sales letter should include the following: 1. The name of your company and contact information. 2. Request for referrals. 3. 5 to 10 business cards. If you are unfamiliar with how to write business letters, there is a sea of training aids and tutorials available.

Get to know the realtors in your area. Especially when you are new to the business, attend as many networking functions as you can. This includes mixers, seminars, open houses, and Chamber of Commerce gatherings. Almost all realtors rely on dependable loan officers to whom to send their clients for financing. It is also very important to visit your local real estate offices to drop off cards, fliers and other marketing materials at least once a week. Taking top-producing agents out to lunch periodically is also a good idea. Note: It may be difficult to get into real estate offices, especially in in the beginning. Keep going back. When office personnel gets to know you, they won't think twice about letting you browse through their offices to hand out materials.

Consider advertising. Most markets have real estate publications that often serve as wonderful advertising vehicles. These publications usually contain current home listings and ads for local real estate offices. Taking out an ad next to the ads of Realtors is a good idea, even it means appearing with other lenders. Classified ads also work wonders. Newspapers often offer very attractive classified rates. A simple classified ad can read something like: "Purchasing or Refinancing a Home? Affordable Home Loans Here. Call John Doe. 555-5555." Note: Before signing any ad contracts, talk to your manager. Your firm may have camera-ready ads that it may require you to use. You may also ask your manager if your company is able to help pay for the ads you run. Remember, ads must run a minimum of four times for them to be effective. Real estate publications are generally free and can be picked up at news racks located as businesses such as gas stations, doctor's offices and super markets.

Create constant activity with refinance leads. When you begin, your phone may not ring as much as you would like it to. You may experience a lack of clients while you are building referral relationships. It is very important to generate activity while you build your purchase business. People are always looking to refinance. Even in times when interest rates are not that attractive, a large segment of the market needs to re-do its existing loans. To ensure that these people contact you, sending out a mass mailing once a week does the trick. This process starts by finding customers with existing loans and possible equity in their homes. You may get this information at your local Register of Deeds office database or by purchasing marketing lists. If you choose to obtain the information yourself (the cheapest route), you will want to either target your prospects by lender name or simply look for loans that are at least two years old. For example, a home purchased or financed 2 years ago, may have built some equity by now. These are the clients that are likely ready to re-do their loans. It is also recommended to go after loans that are $100,000 or higher, depending on your market. Letters sent to these clients should read something like:

"Dear Mr. Jones, Based on public records, you obtained a loan with ABC Lending in 2005. As you know, the market has changed since 2005 and many attractive programs exist for you to get cash from your home or simply to reduce your interest rate. You have been contacted because it looks like I may be able to help you save money on your mortgage. Simply contact me at (878) 555-5555 to get the ball rolling. Sincerely, Jane Doe Mortgage Loan Officer"

Sending out at least 200 letters per week should start your phone ringing. You may also change your approach based on current market conditions. For example, there are many homeowners that currently need to switch from high-rate adjustable mortgages to low-rate fixed loan programs. By looking back at least two years into public records, you will likely attract these types of customers.

Create and maintain proper working databases. This is very important. Potential refinance customers and referral sources should be placed in specific databases. This will help you know who you have contacted and for what purpose. As your leads become actual customers, they should be placed in a separate database for future follow-up. Note: After a customer closes a loan with you, it is likely that won't think about his mortgage needs until you contact him again in the future. It is a good idea to keep in contact with your past clients on a regular basis. A letter should be sent to each closed client 1 month after she closes and every 3 months afterwards. This will keep her aware of your presence and prompt her to send you referrals. If you change firms always keep everyone aware of your move.


Know your firm's products well. If you working for a broker, it is likely that you have many loan programs available to you. Always ask your manager what you have available to you. Hand out business cards to as many people as possible. Almost all home purchases require financing. Always be looking for referrals. Always work a schedule that contains sufficient time for application interviews, sales calls and administrative duties.


Never originate mortgage loans without a license. Most states have strict penalties for doing so. Never over-promise. Never indicate to a client or a referral source that a loan is completely approved until you have obtained a clear-to-close message from your underwriter. Be honest with you clients and your real estate agents and other referral sources. Always be available to speak to your real estate agents and clients. Return phone calls promptly.