A mortgage insurer works with mortgage bankers and loan processors to determine whether a borrower's application for a home loan will be approved and under what repayment terms. The insurer determines whether a borrower constitutes an acceptable risk based on established guidelines and criteria regarding their use and credit history, ability to repay the loan, and the collateral that secures the loan. The U. S. Bureau of Labor Statistics (BLS) predicts 8% growth between 2012 and 2022 in the loan officer job category, which includes mortgage insurers. This is about average growth for all professions, although the US housing market saw a dramatic drop in the 2000s. Learning how to become a mortgage insurer can help you get started on your way to this lucrative profession. and stable.
Steps
Part 1 of 3: Get an Education
Step 1. Take relevant classes in high school
While there is no single career path to becoming a mortgage underwriter, there are important classes that can help you prepare for a job in this field. It is never too early to start studying math because you will need to be proficient in math and data analysis to become a successful mortgage insurer.
The best preparation for a career as a mortgage underwriter is for you to take as many accounting and math classes as you can
Step 2. Apply to college
Most educational institutions do not offer a specialized degree in Mortgage Underwriting, but mortgage companies and banks often seek specific educational credentials in mortgage underwriter applicants. Knowing which courses and degree programs to study can help you land a better position as a mortgage underwriter.
- Loan officers, such as mortgage insurers, are often required to earn a four-year bachelor's degree.
- There are many mortgage insurers who study Business Administration or Finance. However, there is no firm requirement and, in many cases, successful applicants study other things but take extensive courses in accounting, business law, and insurance.
Step 3. Find an internship
Many banks and banking industry trade groups now offer internships of varying lengths to interested college students and recent graduates. You will need to actively pursue an internship, and there may be high competition among other interested students.
- Look online for internships in banking, investing, or credit analysis. You can also contact a banking institution or business group in your region directly by searching online.
- The Massachusetts Bankers Association runs an internship program throughout the summer that gives college students an immersion into the world of financial banking.
- Similar opportunities are available to recent graduates. RBS Citizens (part of the Citizens Financial Group) offers a one-year training program that combines classroom studies in finance and credit analysis with rotating positions at the bank so that trainees have an extensive introduction to all aspects of commercial banking.
Step 4. Get a title
After earning a four-year bachelor's degree, whether in Management, Finance, or another relevant degree, you will qualify to apply for most positions as a mortgage underwriter. However, before you can become a certified loan officer, you will need extensive job training.
Part 2 of 3: Get Training and Experience
Step 1. Apply for positions as an assistant or apprentice
Before you can become a full-fledged mortgage insurer, you'll need to gain entry-level training and experience. For the most part, entry-level positions for recent graduates will be placed as an apprentice or assistant.
- Most mortgage insurers work for banks, credit unions, or mortgage broker companies.
- Search online for entry-level jobs as a mortgage underwriter. You can use websites like Monster.com or Indeed.com, or apply directly to companies by searching for financial institutions in your area.
- Positions as an assistant or apprentice often lead to jobs, either in the office in which you have trained or through contacts you make in that position.
Step 2. Get job training
Training periods usually last a year or less, and many of them only last a few months. This training is necessary for recent graduates to gain experience in the everyday world of mortgages and finance.
- Training could involve informal training, formal training sponsored by the business or company you work for, or a combination of both.
- In the event that the company or company you work for uses subscription software, it will be mandatory for you to take classes and gain experience working with that company's particular software.
- Try to forge strong connections with your colleagues in your entry-level position. Networking is a great way to land jobs in the future, whether it's after the end of your training or when you're ready to advance to a new position.
Step 3. Consider getting certified
Certification is not a prerequisite for employment, but a professional certification can increase an employee's salary by 5-10%. In the US, the National Association of Mortgage Underwriters ("National Association of Mortgage Underwriters" or NAMU) is the primary institution for mortgage insurers seeking certification. The NAMU offers two main certification options:
- Certified Mortgage Underwriter ("Certified Mortgage Underwriter" or NAMU-CMU) - 12 hours of training is required for this certification option. The candidate must then score at least 85% on a 30-question exam and successfully pass a criminal background check.
- Certified Master Mortgage Underwriter (CMMU) - This certification option is considered an advanced degree and requires 24 hours of training. The candidate must still score at least 85% on a 30-question exam and successfully pass a criminal background check.
Part 3 of 3: Developing a profession
Step 1. Know what to expect
A profession as a mortgage underwriter involves a great deal of financial risk analysis. Most of the day-to-day tasks will involve reviewing applications and conducting a detailed analysis of the proposed loan package. Common risks that are predicted and assessed include the following:
- Interest rate riskThis involves the losses that could be suffered as a result of fluctuations in interest rates.
- Default riskThis focuses on the risk that a potential borrower will default on their loans if they become unable to pay their debt.
- Prepayment riskThis risk requires the insurer to speculate about the probability that the borrower will repay the loan before it expires. If so, the borrower eliminates interest payments from the lender that would otherwise have accumulated.
Step 2. Learn how to secure a mortgage
In order to analyze a potential borrower's loan application, a mortgage insurer will need to examine the borrower's credit reports and income history, which may require pay stubs or tax returns. The mortgage insurer uses this information to calculate the borrower's debt-to-income ratio.
- The debt-to-income ratio is calculated by adding the borrower's monthly liabilities (mortgage payments) to his obligations (month-to-month loan and loan payments) and dividing that number by the borrower's monthly net income, taking into account recurring financial obligations, if any (for example, maintenance or maintenance).
- Additional assets, if any (for example, checking or savings accounts, pension funds, mutual funds, and stocks) are also factored into the equation to determine whether or not the potential borrower would be a high risk of default.
Step 3. Specialize your skills
After venturing into the mortgage underwriter business, there isn't much room to move up beyond becoming a manager unless you earn a master's degree in a related field. That is why many mortgage insurers choose to develop advanced skills in specialized loan systems.
- Common loan systems in the US include loans from the Local Authorities Pension Plan (LAPP), loans from the US Department of Agriculture.. UU. (USDA) and Federal Housing Administration (FHA) loans.
- These loan systems are highly specialized and require unique knowledge of loan rules and regulations. Skills are typically developed through continuing education classes, which are regularly offered by professional mortgage organizations (for example, the National Association of Mortgage Brokers).
Advice
- Stay abreast of developments in the real estate and financial markets. Your work will depend on interest rates, lending trends, and whether people buy homes, sell them, do both, and do neither.
- Prepare for busy and slow periods. Your workload will depend on the number of people who get home loans. This will fluctuate throughout the year and from financial period to financial period.