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Interested in pursuing a career in the mortgage business? Then being a mortgage broker might be the right path for you. Successful mortgage brokers earn a pretty good living and often work independently as their own boss. It can be an attractive alternative for someone who wants to work in the financial field but not for a big corporation.
The term “mortgage broker” is not just another name for a mortgage lender or loan officer. A mortgage broker acts as an intermediary to help borrowers obtain mortgages from lenders rather than providing loans directly. A mortgage broker may be a company that employs multiple agents or a single individual working independently or for a firm.
While a loan officer represents the bank or lender they work for and will offer only the loan products they carry, a mortgage broker will often work with several dozen different lenders and arrange loans with any of them. This means a mortgage broker can be more versatile than a single lender, matching clients to the lender and loan product that best serves their needs.
Step 1: Education and Training
To become a mortgage broker, it’s essential to start with the right education and training. A high school diploma is a minimum requirement, but many in the field have a bachelor’s degree in finance, business or a related field.
Regardless of your degree, you’ll need specific training in mortgage brokerage. This includes courses on mortgage principles, real estate finance, ethics and law. These courses prepare you for the complexities of the mortgage lending process and the various financial products, such as mortgages or bonds, available.
Some states might have specific educational requirements, so it’s important to check with your state’s licensing board.
Step 2: Obtain a Mortgage Broker License
After completing your education, the next step is to obtain a mortgage broker license. This process typically takes at least a month and involves completing pre-licensing education and passing a licensing exam. The Nationwide Multistate Licensing System & Registry (NMLS) exam is a common requirement.
Additionally, you may need to pass a background check, which can include credit checks and fingerprinting. Each state has its own licensing requirements and procedures, so be sure to understand and fulfill your state’s specific requirements.
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Step 3: Gain Practical Experience
Once licensed, gaining practical experience is crucial. Working under an experienced broker or at a mortgage brokerage firm can provide valuable hands-on opportunities.
This phase is about learning the day-to-day responsibilities of a mortgage broker, including how to assess clients’ financial situations, understand various loan products and navigate the application and approval processes.
Step 4: Develop Professional Relationships and Networking
Building a network of professional relationships is vital for success as a mortgage broker. This network should include real estate agents, lenders and previous clients. Joining professional associations and attending industry conferences can also be beneficial.
These connections not only provide referrals but also keep you informed about the latest trends and changes in the mortgage industry. Good networking skills help build a robust client base by establishing a strong reputation in the market.
Step 5: Continuous Education and Compliance
Finally, staying updated with education and compliance is essential. The mortgage industry is highly regulated, and laws and regulations can change. Continuous education helps you stay informed about these changes and ensures that you provide accurate and ethical advice to your clients.
Many states require a certain number of continuing education hours to maintain your license. Additionally, staying informed about new mortgage products and market trends will help you serve your clients better and grow your business.
Who Makes a Good Mortgage Broker?
A good mortgage broker possesses a range of qualities, enabling them to effectively serve their clients. Here are some key qualities with examples:
- Knowledgeable: A good mortgage broker has a deep understanding of the mortgage market, including various loan types, interest rates, and lending criteria. They should be able to explain the differences between fixed-rate and variable-rate mortgages and advise on which might be best for a particular client’s situation.
- Excellent communicator: They need to clearly explain complex financial concepts to clients and keep them informed throughout the mortgage process. For instance, they might use simple terms to explain the implications of a balloon payment on a mortgage.
- Detail-oriented: Attention to detail is crucial in ensuring that all paperwork is correctly filled out and submitted on time. This could be as simple as diligently checking a client’s loan application for errors or omissions before submission.
- Problem-solving skills: Mortgage brokers often need to think creatively to find solutions that suit their client’s unique financial situations. They might help a client with a less-than-perfect credit history secure a mortgage by finding a lender with more flexible criteria.
- Client-focused: They should prioritize the needs and goals of their clients, offering personalized advice and solutions. Spend extra time with a client to understand their long-term financial goals and find a mortgage product that aligns with these goals.
Why Become a Mortgage Broker?
There are many reasons why becoming a mortgage broker makes sense, including the potential compensation. The average salary for a mortgage broker in the U.S. is around $170,796, according to Indeed.
A college degree is not absolutely necessary, so this can be an excellent career choice for those who never completed college. Even if you do have a college degree, you will still have to pass the same exams and licensing requirements as other candidates, so you will start on equal footing.
An added advantage of becoming a mortgage broker is its flexibility. Many times you work as an independent contractor, brokering deals between mortgage lenders and potential homebuyers. You can work from home, set your own hours and not spend a fortune on wardrobe or commuting. There are also opportunities for mortgage brokers to work as employees if that is what you prefer.
There are plenty of opportunities out there for professional, hardworking and ethical mortgage brokers. The work is extremely flexible, but the downside is you must be self-disciplined. At the end of a busy day, there will still be calls and emails to return. If you can manage these tasks and develop a positive reputation, you may find that being a mortgage broker is a rewarding career to have.