How to Become a Mortgage Broker

How Does Owner Financing WorkWould you like to become a mortgage broker? After the boom and bust of the last decade, the American housing market is starting to stabilize and opportunities for realtors, investors and mortgage brokers are popping up left and right.

The path to becoming a mortgage broker can vary from state to state, but most US mortgage markets share several common features. Read on to learn how to become a mortgage broker and launch your career in the real estate financing industry.

Are you completely new to the residential mortgage market? Learn how mortgages work and understand the various types of mortgage loans with our US Residential Mortgage Business course.

What does a mortgage broker do?

independent mortgage adviceMost homebuyers lack the capital to buy their dream property using cash. In order to buy a home, they need to secure capital from a lender in the form of a residential mortgage.

Mortgages come in a wide variety of types and sizes. Most mortgages last for 15 to 30 years and require monthly payments. Residential mortgages are typically made up of several components: a principal, interest and property taxes.

Mortgage brokers match borrowers interested in buying property with lenders that are interested in giving out loans. Since mortgage brokers have access to a variety of lenders, they can often secure better deals than borrowers could find on their own.

The modern mortgage lending market is highly competitive, and mortgage brokers assist both borrowers and lenders. Borrowers are able to access exclusive deals on home mortgages, while lenders are able to quickly and easily locate borrowers.

Learn more about the important role brokers play in the mortgage industry in our blog post on independent mortgage advice.

Becoming a mortgage broker

There’s no straightforward path to becoming a mortgage broker like there is for a career in law or medicine. Mortgage brokers need to have the right skillset for the job, in addition to licenses and certifications that allow them to work in their area.

While the requirements for becoming a mortgage broker vary from one state to the next, the skills of successful brokers are the same anywhere. A combination of sales skills, financial literacy and attention to detail are essential for brokerage success.

If you’d like to become a mortgage broker, it’s important to develop a skillset that gives you the foundation for success in the industry before applying for a mortgage broker license.

Developing strong analysis and fraud prevention skills

types of bank accountsWhile many people think of mortgage brokers as the connection between borrowers and lenders, the actual role of a mortgage broker is far more detailed. As part of the process of linking borrowers with lenders, mortgage brokers need to analyze credit ratings and assess a borrower’s suitability for a variety of mortgage products.

Not all borrowers can afford to repay a large mortgage, and many borrowers try to secure mortgages that are beyond their financial means. A good mortgage broker is able to spot overly risky applicants and realign them towards a mortgage that’s less risky and more suitable for their financial situation.

This requires an analytical, risk-focused mindset and an understanding of the key indicators of a fraudulent mortgage application. If you’re interested in becoming a mortgage broker, enroll in our Mortgage Fraud Prevention & Detection course to discover the common signs of a fraudulent or misleading application.

Learning how to find borrowers and close the deal

how to become a mortgage brokerMost mortgage brokers earn the majority of their income from commissions. While base salaries in the mortgage brokerage industry are low, motivated brokers with a sales-focused attitude can easily earn six-figure salaries in the right location.

This makes a knowledge of sales essential for success as a mortgage broker. Many of the most successful mortgage brokers have a background in sales, typically in other commission-based industries like insurance.

There are two components to success as a mortgage broker: being able to locate and attract suitable borrowers, and possessing the industry knowledge and sales ability to find great mortgage deals and persuasively present them to borrowers.

Even if you work for a well-known brokerage, you’ll still be required to track down prospects as a mortgage broker. Develop the prospecting skills for successful deals and a constant flow of borrowers with our No Pressure Prospecting course.

Prospecting and analysis are only the first piece of the puzzle. Once you’ve located borrowers and examined their applications, you need to find a mortgage offer that aligns with their goals as homebuyers. Learn how to close the deal and match your borrowers with great lenders in our Eight Keys to Sales Success course.

How to become a mortgage broker in your state

bigstock-Sold-Sign-169067The path to a career as a mortgage broker can vary between states. In some states, mortgage brokers need to have real estate licenses. In others, you need to acquire the appropriate state license through the National Mortgage Licensing System.

If you’re interested in becoming a mortgage broker, you should check the licensing requirements for your state using the NMLS Resource Center. It’s also important to familiarize yourself with the Common Requirements, which are applicable to every state.

Some states allow mortgage brokers to acquire a license through several different agencies. In California, mortgage brokers are licensed through the Department of Business Oversight and the Bureau of Real Estate.

Before you consider a career as a mortgage broker, you should familiar yourself with the licensing requirements of your state. You should also learn the common requirements regarding professional standards and policy, as well as important industry developments such as the “SAFE Act” of 2008.

Should you become a mortgage broker?

Mortgage brokers play an important role in the process of helping homebuyers get the capital they need to buy property. Being a mortgage broker is a rewarding job, both financially and due to the satisfaction of helping people achieve their dreams.

However, it’s also a demanding job that requires a results-focused attitude, a great work ethic and the ability to be patient and focused. ‘Closing a deal’ as a mortgage broker can take several weeks, making it a poor career for impatient people.

Many mortgage brokers work long hours and spend the majority of their time at work searching for suitable lenders for their clients. As such, successful mortgage brokers tend to have strong people skills and a desire to negotiate and help their clients find the best possible deals.

In addition to the hard work involved in a career as a mortgage broker, there’s the risk of career instability. Many mortgage brokers enjoyed excellent salaries during the real estate boom but struggled to attract borrowers when the market corrected itself and home prices plummeted from 2008 until 2012.

If you have a great work ethic, the ability to prospect and find customers using your intuition and practical marketing skills and the personality type for a rewarding yet risky career, you could be a good mortgage broker. Learn how to launch your career as a successful mortgage broker with our Career Mind Mastery course.

Learn more about careers in the real estate industry

Mortgage brokers sit at the intersection of the finance and real estate industries. As such, the skills that make someone a great mortgage broker can also make them an excellent real estate agent or insurance salesperson.

Learn more about the vital role mortgage brokers play in the real estate market in our blog post on becoming a mortgage broker. If you’d like to learn more about the real estate market, enroll in our Real Estate Fundamentals course and familiarize yourself with the techniques used to value real estate across the country.