Bank, mortgage company or broker? Where to start as a loan officer

One of the first decisions a future loan officer makes is where to work. It's not a detail: the type of company determines which license you need, how you're paid, which products you can offer and how fast you learn. There are three main paths.

1. The bank or credit union

Loan officers at banks, credit unions and other depository institutions don't hold a state license: they are federally registered in NMLS. The SAFE Act requires fingerprints and a background check, but not the SAFE MLO Test, the 20 hours of pre-licensing education or annual continuing education (although many banks run their own training).

Pros: a known brand, clients who already walk into the branch, steadier salary and corporate benefits.

Cons: the product menu is usually limited to what the bank approves, per-loan commission tends to be lower and, if you ever want to move to a state-licensed company, you'll have to meet the test and education requirements.

2. The independent mortgage bank

These are non-bank companies that lend their own money or fund through warehouse lines and sell the loans on the secondary market. Their loan officers need a state license in every state where they work. Their market weight is huge: in 2024, state-licensed companies originated about 59% of U.S. mortgage loans, according to NMLS data.

Pros: a broad menu (conventional, FHA, VA, USDA and sometimes non-QM or ITIN), specialized processing teams, more commission-oriented pay plans and a culture built around realtors and home buyers.

Cons: income depends more on what you produce, especially at the start, and stability can swing with the market.

3. The mortgage broker

A broker doesn't lend its own money: it shops and submits loans to several wholesale lenders. Broker loan officers also need a state license. The big strength is the flexibility to find the best program or price across many lenders.

Pros: access to many programs, competitive pricing and a lot of autonomy.

Cons: the structure is usually smaller; training and support depend heavily on the broker, and most of the responsibility for finding clients is yours.

The comparison at a glance

• License: bank = federal registration; mortgage company and broker = state license.
• Exam and 20 hours: not required at a bank; required at the other two.
• Pay: bank = more salary; mortgage company and broker = more commission.
• Products: bank = the bank's; mortgage company = broad; broker = from many lenders.
• Mobility: a state license travels more easily between licensed companies.

What if I start at a bank and switch later?

You can. The law allows “temporary authority” of up to 120 days so a bank-registered MLO can work at a state-licensed company while finishing the requirements, as long as they meet the conditions (for example, having been registered during the prior year). You still have to pass the exam and complete the education within that window.

So which one should I choose?

If you value stability and want to learn with clients who arrive on their own, a bank is a good start. If you want to build your own business, work closely with realtors and offer more solutions, a mortgage company with strong training is usually the most complete path. A broker works very well for someone who already has a network and commercial discipline.

My advice: more than the type of company, evaluate the people. Ask who will train you, what the pay plan says in writing, who processes your loans and how long they take to close. A good leader in your first two years is worth more than any percentage.