If you can say yes to any of the following, you might have a career as a mortgage broker in the future: Are you naturally good at solving problems? Do you have that rare combination of skills that makes you good with people and good with numbers? Do banks and the financial world fascinate you? If you’re intrigued, you’re in luck because we’re going to explain how to become a mortgage broker.
How to Become a Mortgage Loan Officer in 2022! (Step by Step)
What does a mortgage broker do?
While mortgage brokers assist borrowers in obtaining home loans, they also perform a number of other tasks to assist borrowers in locating the best available rates. Here are the common duties of a mortgage broker:
What is a mortgage broker?
Mortgage brokers, also known as “mortgage loan officers,” help homebuyers or homeowners find the best mortgage rate. They search for the best mortgage terms and interest rates on behalf of their clients.
To provide their clients with the best rates possible, mortgage brokers conduct extensive research on the most recent interest rates and loan terms. Even if a broker establishes a positive working relationship with a lending institution, they prioritize the needs of their clients. Mortgage brokers are knowledgeable about lending terms, institutions, rates, credit reporting, and eligibility requirements.
How much does a mortgage broker make?
You must have a certain level of education and experience to work as a mortgage broker. If you come from the right background, finding work in this field will be easier for you. Follow these steps to become a mortgage broker:
1. Earn a high school diploma and an advanced degree
To become a mortgage broker, you must have at least a high school diploma or your GED. Although a formal degree is not always necessary, you might want to think about obtaining an associate’s or bachelor’s degree in business administration, finance, or accounting to increase your employment options and financial prospects.
2. Take a pre-licensure class
You must obtain your license if you want to become a mortgage broker. Complete a pre-licensing program, a 20-hour course that includes instruction on financial regulations, broker ethics, and federal and state mortgage laws.
3. Pass the National Mortgage License System (NMLS) test
Once you complete the pre-licensure course, pass the NMLS exam. The SAFE Mortgage Loan Originator Test measures your understanding of state laws and regulations, mortgage practices, and other topics. You must obtain a minimum score of 75% to pass both the state and federal portions of the exam.
Make sure you pass background and credit checks in order to renew your license each year. Keep in mind that some states have additional requirements.
4. Register and establish your mortgage brokerage
Register your mortgage brokerage company once you have passed your exam and finished the necessary coursework. Each state has its own set of rules for registering a mortgage brokerage. Through your state’s licensing authority, register your business with various information such as your business name and location.
When registering your brokerage, take into account whether you want to operate an online brokerage business or from a physical location. Some states require you to have a physical location. If you decide on a physical location, factor in the cost of leasing a space as well as how easily your customers can access it. If you choose to run your business online, think about setting up a distraction-free home office.
5. Apply for your mortgage broker license and get your mortgage broker bond
Apply for your mortgage broker license after passing the exam and establishing your company. Determine your states requirements with the NMLS. To obtain a license as a mortgage broker, you typically need to pass an exam, pay a licensing fee, obtain the necessary bond, and submit an application.
In order to obtain your license, you must also obtain your mortgage broker bond. If you operate as a broker in violation of your state’s regulations, having a mortgage broker bond protects your clients. Additionally, it aids in demonstrating your legitimacy to potential clients.
Your state will determine how much of a brokerage bond you’ll need. It’s important to remember that you pay a portion of the total bond amount. Your payment amount is determined by a number of variables, including your financial situation and your company’s specifics.
Once you’ve calculated how much bond you’ll need, fill out an online application. When you receive your bond certificate, sign it, and send it, along with your application for a license, to your state. Your application will be reviewed and approved by the state before your license is issued. You can begin working as a licensed mortgage broker as soon as you have your license.
6. Maintain your license
Follow changes in mortgage lending in your city and state. Additionally, complete annual continuing education courses to keep your license up to date. Each year, you must renew your license and provide documentation of your ongoing education. This not only keeps your license current, but it also guarantees that you are providing your clients with the most recent loan information.
7. Continue your training
It’s crucial to continue your education and training to become a successful mortgage broker. To increase your industry knowledge and better understand various state and federal regulations, think about taking online or in-person courses.
Additionally, be sure to establish connections with other mortgage brokers to assist you in keeping up with your field and discovering the best business practices.
Work environment for a mortgage broker
While some mortgage brokers collaborate with other mortgage professionals in an office setting, others work by themselves. Although each broker may work in a different setting, they often face the same challenges. For instance, they speak with lenders over the phone or in person when they meet with clients in an office.
FAQs about becoming a mortgage broker
Consider these responses to frequently asked questions about the position if you’re thinking about becoming a mortgage broker:
What is the job outlook for a mortgage broker?
Demand for this profession will rise as more people use brokers and sales agents when searching for a home, even though its growth is slower than the average for all other occupations.
How is a mortgage broker different from a real estate agent or loan officer?
Despite some similarities, mortgage brokers and real estate agents have different responsibilities. While real estate agents assist buyers and sellers in finding or selling real estate property, mortgage brokers assist buyers in locating the financing they need to purchase a property.
While a mortgage loan officer and broker may appear to have similar responsibilities, these positions are not identical. While mortgage brokers connect their clients with a variety of mortgage lenders, loan officers only offer mortgage options from the financial institution for which they work.
What is a normal shift like for a mortgage broker?
Depending on the demands of the clients, mortgage brokers may make shifts. For instance, a mortgage broker may decide to start working at 6 a m. to 10 a. m. and then continue working from 2 p. m. to 6 p. m. to better fit their clients schedules. Depending on the needs of their clients, mortgage brokers may also work irregular hours, including nights and weekends.
What skills does a mortgage broker need?
Mortgage brokers need a range of hard and soft skills to be successful in their work, in addition to knowledge of the lending process, lending rates, and lending institutions. Here are some skills a mortgage broker needs:
When examining loan options, rates, and terms, mortgage brokers must have strong attention to detail abilities. It is easier for them to present their clients with worthwhile loan opportunities the more adeptly they read the small print.
To interact with clients and financial institutions effectively as a mortgage broker, you must be outgoing and sociable. Good social skills make it simpler to get along with everyone you work with and increase the enjoyment of your job.
Mortgage brokers must possess sufficient patience to wait the necessary amount of time to find a lender willing to work with their potential borrower. Additionally, they must be willing to wait until their clients make a decision regarding their loan options and accommodate their clients’ various schedules. Additionally, they must be patient during the loan application process, particularly if they are repeatedly turned down by lenders.
Mortgage brokers need to establish strong lender-borrower relationships. Throughout the process of finding a loan and loan approval, it’s crucial to use your effective negotiation skills to keep these two parties on good terms.
To manage and keep track of all the various loan and finance documents while working as a mortgage broker, you must have excellent organizational skills. It is simpler to manage your workload and give your clients a quality home-buying and loan approval process when you maintain organization.
Can you make a lot of money as a mortgage broker?
According to 72 reports from Payscale, the average salary for mortgage brokers is $58,304, with commissions ranging from $12,000 to $178,000 According to the report, brokers with less than a year of experience received average total pay of $46,750, while those with at least 20 years of experience received average pay of $68,784.
Is being a mortgage broker hard?
Although there are no absolute requirements to become a mortgage broker, you will need to complete some sort of training. Many brokers are ex-loan officers who decided to start their own business or real estate agents who wanted to try their hand at the financial industry. A background in sales is often helpful.