Residential Mortgage Loan Officers making $500k+...
I have a good friend in the mortgage business who is making killer money. He's only been in the business for a couple years, but he made $500k last year and will make about $600k this year. The money he's making by itself is crazy as he's in his early-mid 20's, but especially so when considering how easy the job seems in comparison to more sophisticated RE/FIN jobs. Obviously it's a great time to be in the business with rates where they are and everyone and their mother refinancing, but anyone have any insight on what the long term or historical comp is for MLO's? I'd assume they'll experience drastic lay offs when rates go up, but making that kind of money for a few years and then moving on to something else doesn't seem too bad...
Are we talking multifamily residential or straight up SFH's?
Straight up SFH
Honestly I think someone is straight up pulling your leg unless your friend is a far outlier in NYC or SF.
The business is cyclical, generally speaking.. So it can definitely slow down. During the last crisis, for example, their income was $0. Shops up and disappeared. That happened to a lot of businesses, though.
I have two friends who work in Resi lending that started at Quicken type firms before going off to smaller shops and were making $150-250k in their early 20s. They'll both do similar numbers as your friend this year
The money can be great. But it's pure sales. It's a volume based business and if they're making that much, they're likely doing 100+ deals per year. I was talking to one of the friends I mentioned earlier this week, his business nearly doubled through the pandemic due to low rates. He'll do over 20 deals this month alone...
Most folks who do well get to the point where they have to pick between management and being a Senior Originator, because it takes a particular type of person to sustain that level of production throughout your career.
It's also not really glamorous. You're dealing with Joe Shmo and the mortgage on their condo, SFR, etc. The skillset isn't all that transferable unless you were to go management at another lender
I thought about it and passed the NMLS exam. I have family that was in that business pre-2008 and they were clearing just under ~$1m/year since they acted as a broker and had a few originators under them. I also have family friends that are a husband+wife that are still in that business and together they earn just under ~$1m a year with about 30 years of experience.
I realized that I am too risk averse to pigeonhole myself - let's say that one day (could be 10+ years from now, idk) residential mortgage brokerage dies like stock brokers did, what skill set have you built in that business that could translate to some other business? There is nothing quantitative/analytical about it at all - it's pure sales and relationship management.
To play devil's advocate: the skills you build are sales and relationship building. If the mortgage industry dries up you find something else to sell
This is true, but those skills are not respected in B2B gigs unless you earn them in B2B. While I was in college I worked in retail sales at a cell phone company part time. Since I live in the SF Bay, I decided to throw my hat in for trying to get a sales job at a tech company. Having sales experience helped me clear the resume screen, but even though I was a top 5-10% sales rep, since my experience was retail, it wasn't viewed as relevant to the job - just relevant towards having interest in sales.
This is different than B2B sales, if you sell copiers and are good at your job I bet that a tech company would see those skills as relevant and take you directly into a production role rather than a sourcing one (entry level, SDR/BDR)
It's pure sales hustle, just like being a residential broker. The top (maybe 5% or even less) will make that kind of money, the majority make less than $50k (if even, many strike out in less than a year barely doing any deals). That is not average comp by any stretch of the imagination.
There is essentially zero barriers to entry, anyone can get hired, license requirements are minimal. Your friend is really really really good at it. If it were that easy, it would be all up and down this board.
Know a consistent 7 figure producer in this game and some mid 6 figure guys. Super cyclical and as the outlier producer note: “when you’re making money you’re hurting”. Waking up at 530am in CA to cold call on leads in the east coast. 100+ deals a year. No thanks
I want to call residential mortgage loan officers REPE just to watch the forum burn, but alas: Not REPE
You again
I have a family member who worked as one from 2006-2010, in 06, his comp was likely >100K but going into the crisis that dropped to 30-40K range. As mentioned above, the business is highly cyclical, long-term it doesn’t seem like a great spot to be.
Ain’t nothing wrong with being a resi mortgage hardo... Especially if you’re raking in dough.
As others have pointed out : cyclical , super low barrier to entry. I’m not doubting your friend is making that kind of money. Now.
I mean its sales guys, why do we complicate this. The best sales professionals whether its selling resi mortgages, pharmaceuticals, software, etc can make an insane amount of money, in many organizations in my experience, the best sales people will be amongst the top earners.
Oh yeah it's real... my current gf's dad is a successful resi lender, he clears $500K+ during good years, and does virtually zero cold calling now (did a lot when he was building his biz). Pretty tempting industry, but it really is feast or famine depending on the market.
Yep resi loan officers can rake it in. One of my best buddies is set to pull in $200k this year after 3 years in the industry. Not bad for a 26 year old. His boss consistently makes $1MM+ but is the top producer at his firm. All about relationships, if you’re a popular guy who’s got an established network and can handle taking calls at 8pm on a Monday and is okay with working weekends then go for it. Sky’s the limit despite the obvious cyclical nature of the business.
> when rates go up
lol
Most real estate sales rolls when interest rates go up..
I also have friends who make a lot of money on this, but they don't look happy. Perhaps this is because the more money you have, the greater your needs and desires become. I also noticed that it's very hard to surprise a rich person and this is a real obstacle to the happiness. Nevertheless, I believe that a mortgage broker is a decent job that requires good knowledge, skills and effort, moreover, I recently had a positive experience with a mortgage broker Birmingham and I would like to share it with you. Well, I had complex issues with the mortgage and only thanks to an experienced broker I was able to keep my rights to the house.
This party is going to end when rates go up. Which is inevitable at this point.
Your guess is good as mine.
But many are expecting a low interest rate environment going forward. This could be bad as well, if your lending model is focused on refi's. With rates not going lower no need to refinance to get a lower rate. You will then need to rely on reckless spenders and people looking to consolidate debt.
People will still be buying, what I'm seeing is if you can afford a small down payment your mortgage with taxes and insurance are still less than a rent payment.
True. But if over the next 10 years rates go from 0% to 4%... then nobody is going to be refinancing and buying will slow.
Good high finance jobs are always about timing I would assume. Timing of the current/future markets etc
Extremely repetitive and the work is not very sophisticated. High potential upside with good work life balance and usually a base salary... but when the market shifts and rates rise a broker can change their selling angle (not easy but doable) while a mortgage lender is more directly at the mercy of the interest rate.
If the pay is so good now, I see no problems investing in something, like RE, so in the time of need, you know you still have your butt covered.
Look, in order for you to be able to make big money in the mortgage business, you have to be very savvy in this business.
Hey, there’s a bubble!
Well, I sure as shit wouldn't want to be a SFH mortgage broker right now.
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