Math. We all hate it, even though numbers is a big part of our job as a LO. Once we get consumed in the mortgage business, we forget what our goals were once we got in. I’d say 99% of the LOs I’ve talked to, go into the business with the goal to be a millionaire, but after a couple of years or so, they settle around $10,000/month.
In all honestly, $10k a month as a LO ain’t shit. I mean, fuck, when you look at it, knowing the average commission made on a loan is $2500, it only takes 4 closings each month to make $10k. That’s one deal a week. Are you kidding me?
Most of us come from humble beginnings. I was working as a car wash manager prior to my time in the mortgage business. A good portion of folks in the business waited tables prior to closing loans.
That means most of us were flat ass broke prior to joining this industry.
Broke people can’t fathom being rich. It probably sounds weird, but rich is a state of mind. You can’t have a poor mentality and be rich. That being said, if you were waiting tables for $2.12/hour and then you get a job where you make $2500/closing, that’s a lot to take in. It’s easy to say “I want to be a millionaire” but it’s not easy to actually believe you can handle the responsibility that comes along with it.
Matter of fact, back in 2013, I got into an argument on facebook with a commenter who got mad at me because I posted “If you’re not making at least $10k a month as a LO, you need to find another job” The person had excuse after excuse as to why $10k was hard to earn. As I said earlier, it’s all in your head.
So, today, I’m going to break down some simple math and show you how easy it is to make $30,000 every month as a LO. If you’re making more than that already, awesome, here’s how to increase and scale. If you’re not currently making $30k each month, let me show you the way.
Now, much like anything else, I’m not promising you shit. I’m just here to show you some simple numbers and how you can apply them to your prospecting in order to increase your income. Nothing more, nothing less. Just because you read and understand this, doesn’t mean you will make money. It’s the action part of doing this shit that makes it work. That’s on you.
First off, let’s lay some background math in the mix. Let’s say the average loan amount in your area is $250k. Now wait, I know you probably just said “My average is like $180k, so I automatically can’t earn what he’s saying” and you’re wrong. I don’t give a fuck where you live, there are plenty of $250,000 properties in your state. You’re a loan officer, not an agent, so you’re not restricted anywhere geographically. If you’re taking on small loan amounts, STOP. This is a mindset thing and you need to adjust your thinking.
Second off, let’s assume you work for a broker, correspondent or bank and that you get paid 2% on every loan you close. if your average loan is $250,000 and you make 2% of the loan amount, then your commission is $5,000 per loan closed, on average.
Now let’s look at what it takes to turn a $5,000 closed loan, into $30,000 a month in gross income.
Simple math tells us that 30,000 divided by 5, is 6. That means you need to close only 6 loans each month to hit the $30,000 mark. If there are 30 days in a month, that’s one closed loan for every five days. Pretty simple to figure out.
So why aren’t ALL LOs making $30,000 per month?
Most LOs, like most humans, have excuses out the ass. They take on lower loan amounts, take shit deals from non producing agents, and other business and self sabotaging acts that keep them from doing some simple tasks that lead to consistent closings.
As a Loan Officer, you don’t have to go to showings, closings or even meet your clients in person. If you need to close 6, $250k deals each month, that’s only 72 transactions a year. Trust me, there are way more than 72 homes over $250k in your state that sell each month, let alone each year. Oh and big math says that’s only $18,000,000 in closing volume for the year.
What does a loan officer need to do every day in order to hit the $30k per month mark?
Now that we’ve got all the math out of the way, let’s do the marketing part. You can’t get loans without marketing. Marketing simply means reaching out to people who personally could use a loan, or might know someone who needs a loan. AKA Clients and Referral Partners.
If you reach out to only two realtors a day, you’ll have talked to 40 agents in a month, assuming you only work Monday through Friday. Out of 40 agents each month, you should be able to get 3 to commit to send you business. This may take free lunch meetings, several calls and time, but it will happen.
If each of those three agents send you one deal, every other month, you’ve got 1.5 loans each month covered before you wake up on the 1st, because you know they’ve gotta eat too.
On top of agents, if you talk to 2 other potential referral partners a day, you’ll have made 80 contacts each and every month. If we use the same numbers and assume you pull 3 partners and they send you a referral every other month, you now have 3 deals each month no matter what.
But wait, it get’s better!
I’ve told you to make only 4 contacts a day so far. This can all be done via facebook. You can send 4 messages
to people via chat, in a matter of just minutes a day. I’m not asking for you to spend a huge amount of time prospecting each day. I AM asking you to be strategic about WHO you prospect.
If you repeat the above formula for just two months, you will have the 6 loans you need each month. What happens if you repeat the formula for 6 months? Well, truth be told, you will lose some referral partners, piss some people off etc. Shit happens, but with only needing to reach out to 4 people a day, you can stand to have a few drop offs from time to time.
Imagine the feeling knowing you have at least $30,000 worth of loans coming in to your pipeline, via referral partners, on a monthly basis. What would you do with that money? Would you invest it in yourself, your business or your marketing? You should.
If you’d like my personal help with implementing this formula into your mortgage business, all you have to do is fill out the form below. I’ve personally helped dozens of LOs reach the $30k+ mark each month by simply following the formula above and me holding them accountable. Just imagine the change that kind of money can bring to your life.