Frequently Asked Questions about Getting an MLO License

More MLO Licensing FAQs

How hard is the SAFE MLO Test?

The exam is challenging and has a 54% pass rate for first-time takers. The test is fair, and if you know the content, you will do just fine. Many candidates use the 24hourEDU free exam prep course and practice tests to improve their chances of passing.

What happens if I fail the SAFE MLO Test?

If you fail the test, you must wait 30 days before you can retake it. If you fail three times in a row, you must wait 180 days (6 months) before you are eligible to test again.

Are there background and credit checks involved?

Yes. As part of the application process, you must submit fingerprints for an FBI criminal background check and authorize a credit report pull through the NMLS. This is done AFTER you pass the SAFE MLO Exam.

Can I get an MLO license with bad credit?

Having a low credit score does not automatically disqualify you, but the NMLS requires MLOs to demonstrate financial responsibility. Significant derogatory marks, such as open collections, charge-offs, or a pattern of financial mismanagement, can lead to a denial of your license.

Can I get an MLO license with a criminal record?

You cannot obtain an MLO license if you have ever been convicted of a felony involving fraud, dishonesty, a breach of trust, or money laundering. A felony conviction for other crimes in the last seven years will also result in a denial.

How much does it cost to get an MLO license?

Each state's regulatory agency sets its own fees, which can range from around $50 to $300+ for initial applications. This includes the NMLS processing fee, background check and credit report fees, exam fee, and the state-specific license fee. This does not include the cost of the 20-hour pre-licensing course.

How long does the licensing process take?

The entire process can take anywhere from 4 to 12 weeks, depending on how quickly you complete the education, pass the exam, and how long your state's regulatory agency takes to approve your application.

What is company sponsorship?

A new MLO can apply for their license without a sponsor and the application will get approved in an "inactive" status. Once you find a sponsor, they will activate the license for you. To originate loans, your MLO license must be sponsored by a licensed mortgage company (a lender or broker). This means you cannot act as an independent MLO. Your employer's NMLS ID will be linked to yours, and they are responsible for supervising your activities. You will be able to set your hours and work from home in most cases.

Do I need a sponsor to get my license?

You can complete the education and pass the exam without a sponsor. However, your license will not become active until you are hired and a company initiates sponsorship for you through the NMLS.

Can I be licensed in multiple states?

Yes. You can hold licenses in as many states as you want. You must satisfy the specific licensing requirements for each state, which may include additional education and state application fees.

What is the Uniform State Test (UST)?

The UST is a test section that is now used by most states in place of a state-specific exam. It covers standardized content related to state mortgage laws. Many people refer to the entire exam as the NMLS Test; however, it is actually called the SAFE MLO Exam, which is the preferred name according to the NMLS.

What does a Mortgage Loan Originator do day-to-day?

A typical day for an MLO involves advising clients on loan options, taking loan applications, collecting financial documents, communicating with underwriters and processors, and networking to find new clients.

How do MLOs get paid?

Most MLOs are paid on commission, which is typically a percentage of the total loan amount. This percentage is known as a basis point (BPS). Some MLOs may earn a salary plus a smaller commission or bonus. The most successful MLOs prefer to work for 100% commissions, because their earning potential is unlimited.

What is the difference between a licensed MLO and a registered MLO?

Licensed MLOs work for non-bank lenders and brokers and are licensed by the state. Registered MLOs work for federally insured depository institutions (like Wells Fargo or Chase) and are registered with the NMLS but are not state-licensed.

Do I need to renew my MLO license?

Yes. You must renew your MLO license annually through the NMLS between November 1 and December 31.

What is Continuing Education (CE)?

To renew your license, you must complete at least 8 hours of NMLS-approved Continuing Education (CE) each year. This includes 3 hours of Federal Law, 2 hours of Ethics, 2 hours of Non-traditional Mortgage training, and 1 elective hour. Some states have additional state-specific CE requirements.

What happens if I don't renew my license on time?

If you fail to renew by December 31, your license will become inactive, and you cannot legally originate loans. You may be able to reinstate your license in the following months, but late fees will apply.

What skills are most important for a successful MLO?

Successful MLOs possess strong communication and interpersonal skills, a good understanding of finance and math, attention to detail, and excellent customer service abilities.

Where can I find the specific MLO license requirements for my state?

The most reliable source for state-specific requirements is the NMLS Resource Center website. You can look up your state's licensing agency and view a detailed checklist of all requirements. Our state licensing pages also provide the information you need to get started with your education for the state or states you plan to operate in as an individually licensed mortgage loan originator.