What Does a Loan Officer Do?

Managing mortgage loans requires inter-personal skills, strong organization and attention to detail. Learn more about this career option and explore resources that offer information about job duties, education requirements, salary, job growth and other important details.


Many loan officers earn a base salary as well as various incentive programs. These vary by company and product, but often include a tiered system that rewards team members for increasing net loan growth.


Loan officers need to have a good understanding of the lending products that their institutions offer and be able to explain them clearly. They also need to know how to factor in a would-be borrower’s creditworthiness and guide them through the application process.

Many financial institutions provide on-the-job training for new loan officers to familiarize them with the different mortgage and financing options available to their clients. This will include learning how to use software programs to manage prospective home buyers and organize client information and documents. It will also teach them how to follow regulations set by federal and state lenders.

Most banks and credit unions have specific goals they want their loan officers to achieve each month. These may include meeting specific number of sales, meeting a certain number of approved loans or increasing overall loan volume. It is important for a loan officer to keep abreast of the goals of their employer so they can work toward achieving them in the most productive manner.

While many loan officers are salaried, some also earn commissions for bringing in business and for the services they provide to borrowers. In addition, some loan officers seek out new clients through marketing strategies like social media and working alongside real estate agents. They also earn front end compensation for the time and effort they put into the application process, though a portion of this often reverts back to their banks of affiliation.


During the underwriting process, loan officers collect and verify financial documents to determine whether a borrower qualifies for a loan. They use a variety of computer programs to evaluate the information and decide if a loan is approved or not. This is called automated underwriting, and it’s a faster way to make decisions.

As a result, it’s a good idea for loan officers to know how to work with these programs. This allows them to make recommendations about which program best suits a customer’s needs, while still meeting regulatory and underwriting requirements.

A good loan officer understands the nuances of each mortgage product offered by their employer and can explain them to customers. He or she can also help them navigate the mortgage application process, including completing all necessary paperwork. This is important because a missed question on an application or missing documentation can delay the loan process, which may cause borrowers to lose interest in financing their home.

A loan officer can earn a salary and benefits from the company where he or she works, but it’s also possible to get compensated through various incentive programs. For example, some companies offer bonuses based on the number of loans completed, which can give a loan officer an extra income. Others provide flat per-file incentives, which are designed to improve sales results and help motivate the lending team.


Those who work in loan officer roles have to be well-acquainted with all of the lending products that their financial institution offers. They also must know the different federal and state regulations pertaining to those loans. They must be able to communicate with clients clearly, factor in creditworthiness and make sure that all deadlines are met. Most loan officers have a bachelor’s degree, though some acquire skills through self-study and on-the-job training.

Loan officers often work at banks, credit unions or mortgage companies. They help people and businesses borrow money to accomplish goals such as purchasing a new home or expanding a business. In addition to guiding applicants through the process of applying for loans, they often serve as mediators between would-be borrowers and the financial institutions that will provide the funds necessary to complete the transaction.

Loan officers work with all types of loans, but the mortgage loan is one of their most common responsibilities. Mortgage loan officers have to deal with the complexities of mortgage regulations at both the federal and state level, as well as keeping up with the latest changes to those regulations. The job of a loan officer is not for everyone, but it can be rewarding for those who choose to pursue this career path. The income potential for a qualified loan officer is high, with more than 10% making six figures per year.