- Loan Officer Compensation Plans
- How Much Do Loan Officers Make?
- Factors That Affect Loan Officer Compensation
- How to Negotiate Your Loan Officer Compensation Package
A loan officer’s job is to help people obtain loans from banks. They are paid either by commission or salary, and sometimes both.
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Loan Officer Compensation Plans
Loan officers typically get paid one of three ways: commission, salary, or a combination of the two. Commission-based loan officers are paid a percentage of the loan amount, while salary-based loan officers are paid a set salary regardless of how many loans they originate. Some loan officers are paid a base salary plus commission.
Base Salary + Commission
The most common type of loan officer compensation plan is a base salary plus commission. This means that you will earn a fixed salary, typically based on your experience, plus a commission on each loan that you originate. The average base salary for loan officers was $63,650 in 2019, according to the U.S. Bureau of Labor Statistics (BLS). The average commission was $17,WTFC per loan, according to the National Association of Mortgage Loan Officers (NAMLO).
Commission-based compensation plans can vary significantly from one company to another. Some companies may offer a lower base salary but a higher commission percentage, while others may offer a higher base salary but a lower commission percentage. Some companies may also offer bonuses or other incentives for originating loans with certain characteristics, such as loans for first-time home buyers or loans that are above a certain dollar amount.
In general, the more loans you originate, the more money you will make under a commission-based compensation plan. However, it is important to consider the quality of the loans as well as the quantity when evaluating whether a particular compensation plan is right for you. For example, if you are able to originate high-quality loans that have a low risk of default, you may be able to earn more money under a commission-based compensation plan than under a salary-only compensation plan.
Commission Only loan officer compensation plans are 100% dependent on how many loans are closed. There is no salary, and no guaranteed income. While this type of plan can be very lucrative for the top performers, it can also be a big risk for those who are not accustomed to working with an ever-changing income.
Salary + Bonus
Loan officers typically receive a salary plus commission on the loan products they originate. The salary is usually a set amount, although in some cases it may be a draw against future commissions. The commission is typically a percentage of the loan amount and is paid when the loan closes. Some companies may also offer a bonus structure for loan officers who meet certain production goals.
How Much Do Loan Officers Make?
Loan officers typically get paid a commission, which is a percentage of the loan amount. The commission is usually paid to the loan officer by the lender. The average commission is 1% of the loan amount, but it can vary depending on the type of loan and the lender. Some loan officers also receive a salary, but this is less common.
The national average salary for a Loan Officer is $63,457 in United States. Filter by location to see Loan Officer salaries in your area. Salary estimates are based on 2,033 salaries submitted anonymously to Glassdoor by Loan Officer employees
Top 10% Earnings
The top 10% of loan officers earned $166,400 or more, while the bottom 10% earned $57,390 or less. Loan officers earn a median salary of $81,080 per year. The best-paid 25% made $99,710 that year, while the lowest-paid 25% made $64,160.
Bottom 10% Earnings
Data from the Bureau of Labor Statistics shows that the bottom 10% of loan officers earned an annual salary of $33,410 or less in 2012. The median annual salary for all loan officers was $63,430, and the top 10% earned an annual salary of $130,800 or more.
Factors That Affect Loan Officer Compensation
Loan officers typically get paid 1% of the loan amount for originating a loan. This means that if a loan officer originates a $100,000 loan, they would make $1,000. There are a few other factors that can affect loan officer compensation. These include the type of loan, the loan terms, the size of the loan, and the lender.
The type of company for which a loan officer works is one factor that affects his or her compensation. For example, commercial banks typically pay their loan officers lower salaries than credit unions or other lending institutions. In fact, the average salary for a loan officer working in a commercial bank was $63,650 in 2012, according to the U.S. Bureau of Labor Statistics (BLS). In contrast, the average salary for a loan officer working in a credit union was $67,350. The BLS also reported that the average salary for loan officers working in depository institutions was $66,020.
One of the most important factors that affects loan officer compensation is geographic location. According to a study by the Mortgage Bankers Association, loan officers in metropolitan areas tend to make significantly more money than those who work in rural areas. The median salary for loan officers working in metropolitan areas was $61,500, while the median salary for those working in rural areas was just $34,000.
Loan officers typically get paid 1% of the loan amount for each loan they originate. For example, if a loan officer originates a $200,000 mortgage loan, their compensation would be $2,000. However, the compensation may vary depending on the type of loan being originated. For example, government-backed loans (e.g., FHA, VA, and USDA loans) typically have lower origination fees than conventional loans because the government insures them against default. As a result, loan officers may only receive 0.50% of the loan amount for these types of loans.
How to Negotiate Your Loan Officer Compensation Package
The majority of loan officers are paid based on a commission, which is a percentage of the loan amount. Some loan officers are also paid a salary, which may or may not be commission-based as well. In order to negotiate your loan officer compensation package, you will need to know how loan officers are typically paid.
Do Your Research
The first step in any negotiation is to do your research. You need to know what the average loan officer compensation package looks like so you can have a benchmark for what you should be paid. You can find this information by talking to other loan officers, looking at industry publications, or searching online.
Once you have an idea of what the average compensation package looks like, you can start to negotiate your own package. When you’re negotiating, it’s important to remember that you’re not just negotiating your salary. You’re also negotiating other aspects of your compensation package, such as bonuses, benefits, and paid time off. Make sure you consider all of these factors when you’re negotiating your package.
Know Your Worth
The first thing you need to do is know your worth. How much are you willing to work for? How much are you worth to the company? You need to have a number in mind before you start negotiating. If you don’t, the loan officer will try to low-ball you and you could end up with a salary that is much lower than what you deserve.
The next thing you need to do is research the average salary for loan officers in your area. You can do this by searching online or by talking to other loan officers in your area. This will give you a good idea of what the going rate is for loan officers in your area and will help you make sure that you are being offered a fair salary.
Finally, when you are ready to negotiate your salary, be prepared to walk away from the negotiation if necessary. If the loan officer is not willing to meet your demands, then it might be best to look for another job. Remember, there are plenty of other companies out there who would be happy to have you as an employee, so don’t sell yourself short!
Be Prepared to Walk Away
When you’re negotiating your loan officer compensation package, it’s important to be prepared to walk away from the table if you don’t get what you want. If you have another job offer on the table, make sure your current employer knows that you’re considering other options. This will give you more leverage in the negotiation process.
It’s also important to know what you’re worth. Research salaries for loan officers in your area and try to get a sense of what the going rate is for someone with your experience and qualifications. This will help you determine how much to ask for when negotiating your salary.
Finally, don’t be afraid to ask for what you want. Your employer won’t know what you want unless you tell them, so be assertive in your negotiation. Remember, they want to keep you happy and keeping good employees is worth more to them than a few extra dollars in their budget.