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3 Tips How To Become An Independent Mortgage Broker

( - How To Become An Independent Mortgage Broker - A mortgage broker helps prospective homeowners with the financial side of things. A broker communicates with lending institutions and assists individuals in their home purchases by acting as an intermediary between lenders and buyers. Becoming an independent mortgage broker, where you work for yourself and personally with clients rather than through a mortgage brokerage firm, can lead to a sustainable career. However, you must obtain your mortgage broker license and use certain tactics to find and keep clients.

  • Research and gain experience

How to Become an Independent Mortgage Broker: 13 Steps

Find out about the role of a mortgage broker. Before deciding to become an independent mortgage broker, it is important that you fully understand the role and responsibilities of the position. There are two types of mortgage brokers: residential mortgage brokers and commercial mortgage brokers. Housing agents work with individual home buyers to help them obtain financing from lenders for their mortgage. Commercial brokers work with businesses on a commission basis to help them finance commercial property mortgages.

In both specializations, your job is to advise your client on choosing the best loans for them from different lenders and to process loan applications. To process loan applications, you must obtain the customer's credit report or financial statements and confirm their income and assets.

To do this job well, you also need a detailed understanding of government real estate financing regulations to help your client decide if the property is worth buying.

You must also be willing to travel frequently to meet clients and meet lenders in person.

How to Become an Independent Mortgage Broker: 13 Steps

Confirm you have your high school diploma or equivalent GED certification. To be an independent mortgage broker you should have your high school diploma. Although the industry prefers that you have a bachelor's degree or professional degree in business, finance or economics, this is not required.

In most states and territories, you must also obtain a mortgage broker license to become a credit institution-approved mortgage broker. You can also obtain certifications from the National Association of Mortgage Brokers to improve your skills and knowledge as a mortgage broker.

As of 2012, the median salary for a mortgage broker was $67,000. However, this amount may vary with independent mortgage brokers.

How to Become an Independent Mortgage Broker: 13 Steps

Consider gaining experience as a real estate agent or loan officer. Experience in real estate or banking will help you collect and analyze financial documents, use lending software, and understand real estate market trends.

Demand for loan officers and real estate agents is expected to grow by 8%-11% from 2012 to 2022. Stepping into a growing job market can also help boost your mortgage brokerage career.

  • Obtain a mortgage broker license

How to Become an Independent Mortgage Broker: 13 Steps

Check the mortgage licensing laws in your state or region. Regulations for mortgage brokers vary from state to state. Use an interactive map of the US to find legislation in your state by clicking here. You can also contact the National Association of Mortgage Brokers (NAMB) for more details on the licensing laws in your state.

Some states require mortgage brokers to have a mortgage license before they can become brokers and some states do not. There are also certain regulations, e.g. B. whether a mortgage broker can process a loan for a client's 1st and 2nd mortgage and whether a broker must have a physical office in the state in order to be a legal mortgage broker in that state.

With the growing number of independent mortgage brokers working online, licensing laws are less strict regarding a physical office, but some states require a mortgage broker license to broker mortgages for clients.

For example, in Arizona, all mortgage brokers must have a physical office in Arizona and the broker must be an Arizona resident. But in New York, a mortgage broker can work online from a remote location as long as they have mortgage brokerage experience and current, original credit reports.

How to Become an Independent Mortgage Broker: 13 Steps

Enroll in mortgage licensing courses and complete all courses. Most states process mortgage licenses through the National Mortgage Licensing Center, which you can access online here. Approved mortgage licensing courses are 20 hours or more and should include three hours of federal law, three hours of ethics, two hours of non-traditional mortgage origination, and 12 or more hours of electives in addition to specific content required in that state. You can take these courses online from the comfort of your own home.

The NMLS license fee for a mortgage broker is US$1500 in most states. Most applications also require you to provide a $10,000 bond.

Some states also encourage mortgage brokers to gain hands-on experience in the industry, a total of about three to five years, before applying for their license.

How to Become an Independent Mortgage Broker: 13 Steps

Receive documentation proving you are now licensed. Once you complete your coursework, you will receive documentation proving that you are now a licensed mortgage broker. You can then use this license to show potential customers that you have certified industry knowledge.

Many states also require licensed mortgage brokers to take continuing education courses once a year once they receive their license to keep their knowledge current.

How to Become an Independent Mortgage Broker: 13 Steps

Consider getting certifications through the National Association of Mortgage Brokers. There are three levels of certification you can earn: entry-level (Certified Residential Mortgage Specialist), intermediate (Certified Mortgage Consultant), and advanced. These certifications expand your existing knowledge of the lending process and the real estate industry, enabling you to better serve your clients.

To apply for entry-level and intermediate level certifications, you must have a certain level of work experience and years in the industry. You then take a multiple-choice exam for each certification. Each certification expires after three years.

  • Setting up your brokerage service

How to Become an Independent Mortgage Broker: 13 Steps

Gain hands-on experience in the industry. Many mortgage brokers start out with larger mortgage companies before going freelance. You can also gain experience in the mortgage department of a housing company or bank to get a feel for the industry. Three to five years of experience in a larger firm is recommended before becoming an independent broker.

Another option is to join an online mortgage service like and gain experience at an online-based company. This is a good option if you're thinking about running an independent online mortgage agency. However, services like are structured, which means that as a broker in a large organization, you have to deal with overhead and other costs.

How to Become an Independent Mortgage Broker: 13 Steps

Decide whether you will have a physical location or an online-based service. Some states do not allow you to be a mortgage broker without a physical office or place of business, while other states allow brokers to exist online and work from a home office. Check what your state allows, then decide whether you'd rather work from an office or from home.

Many independent mortgage brokers enjoy the flexibility of working from home, communicating with clients online, and meeting clients in person in a casual setting. #*Some independent mortgage brokers only work part-time and therefore do not feel the need to rent office space.

How to Become an Independent Mortgage Broker: 13 Steps

Budget your startup costs. Your start-up costs will depend on whether you have an existing home office that you will be working from or you are renting office space. You'll also need to plan transportation to meet clients and lenders, as well as office supplies and a computer. Your startup costs can range from $2,000 to $10,000 depending on the office setup and supplies you need.

Keep in mind that most residential mortgage brokers make a profit by charging a brokerage fee, which is between 1% and 2% of the mortgage. Most brokers charge lenders this fee, but some brokers may charge borrowers this fee if the mortgage brokerage process is complex or the lending process requires specialized knowledge.

How to Become an Independent Mortgage Broker: 13 Steps

Find your first customer. Mortgage brokers work on a commission basis through the lending institution that is advancing funds for the mortgage. The commission can range from several hundred dollars to thousands of dollars depending on the mortgage amount requested by the client. To be profitable, you need to find and retain your customers. You want your customers to have a positive experience and help them achieve their ideal mortgage because they will then refer you to other potential customers.

Mortgage brokers often bring their existing relationships with lenders from their days with a larger company into their independent practice. These lenders will then refer clients to the brokers and foster a healthy, mutually beneficial relationship.

Some mortgage brokers charge customers more for difficult or more complex financing situations or collect a fee from the lending institution.

How to Become an Independent Mortgage Broker: 13 Steps

Build relationships with credit institutions and real estate agents. The mortgage brokerage industry thrives on repeat business and referrals. Focus on fostering good relationships with key industry touchpoints: the lenders and the real estate agents. If you successfully fund a complex mortgage for a client, your client will be satisfied, and the lending institution will consider you a reliable and dependable mortgage broker.

Realtors can also help connect you with clients if they see you as a solid broker with a reputation for successfully brokering mortgages.

How to Become an Independent Mortgage Broker: 13 Steps

Consider learning other brokerage skills. As mortgage brokerage regulations shift and change, independent mortgage brokers must find ways to differentiate themselves and offer different capabilities to their clients. For example, an independent mortgage broker who is also a certified insurer can help clients navigate tricky financing issues with the lending institution and be the broker for complex mortgages.

Also, an independent mortgage broker that offers exclusive customer service and personal attention to its clients will differentiate itself from a sea of ​​other independent mortgage brokers who may not be able to provide detailed customer care.

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