Steps to Getting a Mortgage License in California

To sell mortgages, you need to be licensed as a mortgage loan originator (MLO). This is also sometimes called a "loan officer" or "mortgage broker." Each state has its own license requirements for becoming a mortgage loan originator. All states use the Nationwide Multistate Licensing System (NMLS) to track MLO licensing. To do business as a mortgage loan originator, you need to:

1. Apply for an NMLS account and ID number.
2. Complete your California mortgage Pre-license Education ("PE").
3. Pass a licensing exam.
4. Apply for your California mortgage license though the NMLS.
5. Complete background checks and pay all fees.
6. Associate your NMLS account with an employer.

1) Create Your NMLS Account

You can get started with this step now. By starting an NMLS account, you will be assigned an NMLS Unique Identifier ("NMLS ID") which will be your license number for the rest of your mortgage career. You will need this number before you take any education or do business. Coordinate your account creation with your future employer.

Create your NMLS account here.

2) Complete Your California Pre-License Education

In California, you can get your mortgage loan originator license through either the California Department of Real Estate (DRE) or the California Department of Financial Protection and Innovation (DFPI), previously known as the Department of Business Oversight (DBO). Which one is right for you? If you plan to work for a CA-DFPI licensed mortgage company, you should get a DFPI license. Otherwise, licensing through the DRE is likely what you need.

Before you can get your MLO license, you need to take required pre-license education. Each state has different education requirements for doing business. If you work for a non-bank institution (a "mortgage company"), you must get licensed in each state that you want to do business in. The SAFE Act requires that you take 20 hours of pre-license education at a minimum. The DFPI requires 2 extra hours of DFPI-specific education. Some states have additional requirements. Visit the NMLS website for a complete list of state requirements.

DRE licensees should take the basic 20-hour pre-license course. DFPI licensees need to take the 20-hour course and a required 2-hour DFPI elective.

3) Pass a Licensing Exam

After your education is completed and recorded, you need to schedule an appointment to take your licensing examination at a testing facility. This is sometimes called the "SAFE test" or "MLO exam". This exam is administrated by Prometric. Follow the guides below to schedule your exam:

HOW TO SCHEDULE YOUR EXAM

Exam scheduling quick guide

Contact Prometric at 1-877-671-6657 or visit their website.

4) Apply for a License

You will need to complete and submit an application for a mortgage loan origination license via the NMLS website. (NOTE: The mortgage company you plan to work for may fill out your application for you. Please check with them before submitting any paperwork.)

How to apply for a license

5) Background Checks

As part of your application or hiring process, some states require you to get a criminal background check, submit fingerprints, and submit to a credit report. Refer to the NMLS Checklist Compiler for help in determining if you need to comply with this requirement:

NMLS Checklist Compiler

6) Get Hired

Although you may already be working closely with your new employer, your NMLS record will need to be associated with your employer before you can receive a mortgage loan license and do business.

How to sponsor your NMLS record

Frequently Asked Questions About Mortgage Licensing

Do I need a license to sell mortgages?

It depends. You must be licensed if you work for a non-depository institution (usually an independent mortgage company). If you work for a bank, credit union, or government organization, you do not need to be licensed. However, all persons that originate mortgage loans need to be registered with the NMLS.

What is a "mortgage loan originator"?

A mortgage loan originator is the legal term for a person that sells mortgages. This person works with customers to choose mortgage products and takes applications for loans. These persons are also referred to as "MLOs", "loan officers", and sometimes colloquially as "loan brokers" or "lenders".

What is the difference between a "mortgage loan originator" and a "loan broker"?

A mortgage broker manages and operates an independent mortgage business and may oversee employees. Becoming a mortgage broker usually requires several years of industry experience and additional licensing. Laws vary by state.

What is the difference between a "mortgage loan originator" and a "loan processor"?

A mortgage loan originator (MLO) is a salesperson that works with customers and must be licensed or registered. A loan processor is someone that reviews customer paperwork and does research to determine the customer's qualifications for the loan. A supervised loan processor generally does not need to be licensed.

Can I work independently as a mortgage loan originator?

A mortgage loan originator must be supervised by a licensed broker and must have their license associated with a particular mortgage company. Although working as an MLO can provide some level of work independence, persons that want to run their own mortgage company need to be licensed as a broker.

Do I need a college degree to become a mortgage loan originator?

No. Instead, you must take pre-license education as prescribed by the SAFE Act (about 20 hours) and pass a licensing exam.

Can I get a mortgage license with bad credit?

Yes. There is no minimum credit score required to get a mortgage license. However, most state agencies will be looking for signs of "fiscal responsibility" from license applicants. Having a low credit score will not disqualify anyone from getting a license. Inability to manage one's own finances may lead to a rejected application.

Can I get a mortgage license if I have a criminal record?

Generally speaking, persons convicted of financial crimes or ID-theft will not qualify for a mortgage license. However, each state has its own laws on this topic. Some are more or less strict about criminal records.

How much does it cost to get a mortgage license?

About $400-500. The total cost to start selling mortgages depends on which state you are being licensed in. The cost includes pre-license education through an NMLS-approved course provider, licensing exam fee, background check, credit report, and application fees.

How do I get a mortgage license in multiple states?

You need a separate mortgage license in every state that you handle business from. Each state provides its own mortgage licenses. If your company works with customers from multiple states, you will need multiple licenses in order to service all customers.

How long does it take to get a mortgage license?

About 6 weeks. Times vary by state agency. Pre-license education can be completed in as little as 4 days, while the license application process take up most of the time.

How difficult is the mortgage licensing exam?

The first-time pass rate for the licensing exam is 55%. The NMLS updates these numbers regularly. Persons that pass the exam take their study seriously and make sure to review all of the topic outlines that the NMLS provides for free. We strongly recommend that you get a test-prep or test-review product along with your pre-license education to reinforce concepts you will be tested over.

How long is the mortgage licensing exam?

The exam is 190 minutes long and contains 120 questions. A score of 75% or greater is required to pass. Results will be shown to you on a computer screen immediately after completing the exam.

What happens if I fail the mortgage licensing exam?

Just take it again! There is a 30-day waiting period between attempts. After the third attempt, there is a 180-day waiting period.

How should I study for the mortgage licensing exam?

Review the MLO Testing Handbook by the NMLS. It contains a comprehensive topic outline that will be tested over. OnlineEd's courses come with test prep study tools and an exam simulator to help you get ready for the exam.

How long is a mortgage pre-license course?

Most states require about 20 credit hours. Courses provided by OnlineEd can be completed in as few as 4 days. The instructor will guide the class for the first 4 days, after which students may access the final exam. All courses must be completed within 14 days.

Can I take mortgage pre-license courses from home?

Yes! All of OnlineEd's courses are taken online. Most of the course can be taken on your own schedule, but we also have regular times to meet with a live instructor.

What does NMLS stand for?

Nationwide Multistate Licensing System. The NMLS handles various mortgage license and registration functions through its website including licensing, tracking, testing, record keeping, and communication. The NMLS was initially called the Nationwide Mortgage Licensing System until its services were expanded to cover additional industries.

How do I get an NMLS license?

The Nationwide Multistate Licensing System handles mortgage license applications on behalf of individual state agencies. Each state issues its own licenses to do mortgage business inside the state. You can get a mortgage license by taking required pre-license education, passing a licensing exam, and applying for a state mortgage license through the NMLS website.