How to Become a Mortgage Broker

Mortgage Brokers are licensed professionals who help their clients search for and secure a loan that helps pay for any type of real estate property.

They have thorough knowledge regarding financing companies and their loan rates as well as state laws.

These professionals are required to be licensed in their state in order to work in this profession.

As opposed to Mortgage Bankers, Mortgage Brokers do not have to solely work with one lender; they can work with a variety of them in order to secure the best financing options for their clients.

A Mortgage Broker can be considered a “go between” person or a matchmaker in the sense that they match their clients with a lending institution that is able to give the best financing package available.

In order to become a Mortgage Broker, candidates should be self motivated, be able to perform research on lending companies and their clients as well as have the ability to keep their clients’ personal information private.

In fact, privacy concerns are one of the reasons why Mortgage Brokers need to secure licensure in the field.

Education Requirements to Become a Mortgage Broker

In order for someone to become a Mortgage Broker, a candidate has to become licensed in the state they wish to practice in.

Education backgrounds vary within this profession with some professionals having acquired a high school diploma, completion of a certification program, or an Associate’s degree.

However, all candidates are required to pass a licensing exam before they can help any real estate clients.

For individuals who pursue an Associate’s degree, their option is to attend an accredited community college and fulfill the requirements for an Applied Science program in Mortgage Banking (A.S.

in Mortgage Banking).

Associate’s degrees typically take about two years to complete.

A certification program requires less time to complete with some requiring only one semester.

A student will learn a variety of information regarding loans such as underwriting and how to close a loan.

A certification program can help a candidate prepare for their state’s licensing exam.

Each individual state has its own established licensing laws and requirements.

Candidates will have to research their states prerequisites in order to become a Mortgage Broker.

A helpful site with links to all states’ mortgage licensing offices is Mortgage Banker Licensing.

Mortgage Brokers must also take continuing education classes in preparation for license renewals.

Renewal requirements and frequency between renewals will also depend on each individual state.

Mortgage Broker Job Description

A professional Mortgage Broker can work as an independent contractor or a lending company.

Mortgage Brokers are responsible for researching a variety of financial institutions and rates in order to offer their clients the best mortgage financial package possible for them.

Mortgage Broker professionals need the ability to keep confidential information private because one of their main responsibilities is to gather sensitive information about their clients in order to look up their credit scores and determine financing options for them.

The first step is for a Mortgage Broker to collect all the information necessary by having the client fill out an application for a mortgage loan.

Using the submitted information, Mortgage Brokers will establish a comprehensive financial background of their clients.

Mortgage Brokers gather and use private information such as date of birth, marriage status, the type of employment, salary information and frequency of pay, social security numbers and other types of loans their clients are paying off.

Using their client’s personal information, Mortgage Brokers will research and present the best financing options to them.

A Mortgage Broker establishes several connections with employees at financial institutions in order to be able to gather information regarding their mortgage loan services.

These professionals can also expect to work some nights and weekends because the majority of people work during the day.

Mortgage Broker Salary and Career Path

A Mortgage Broker’s income depends on their ability to sell and locate potential clients.

The national median wage for these professionals in 2006 was approximately $51,000 annually.

As for the job outlook for Mortgage Brokers, they will be affected by the public’s heavy use of the internet.

Clients can now visit a financial institution’s direct website to shop for mortgage rates and can input basic personal information to get quotes.

This will affect the use of the Mortgage Broker as a middleman and will create slow growth for people in this profession.

Frequently Asked Questions

What does a mortgage broker do?

The main goal of a mortgage broker is to help the clients find the right type of home loan, in accordance with their needs.

Mortgage brokers guide people through the home buying process and provide expert advice.

The typical responsibilities of the specialist include evaluating the needs of the client; calculating borrowing power; comparing the hundreds of home loan products available; giving expert advice to help the clients choose the perfect option; doing all the paperwork, and so on.

There are certain acts that ensure professional and ethical standards and help protect borrowers; every mortgage broker has to respect these obligations and always make sure that the lease or the credit contract is not unsuitable for the customer.

How much do mortgage brokers make?

On average, mortgage brokers make a little more than $58.000 per year in the United States.

In case you decide to follow this career path, you can expect to earn anywhere between $30.000 and $126.000 annually.

The salary would certainly depend on the overall experience, geographical area, and the number of customers.

An entry-level mortgage broker with less than a year of experience can make around $43.500 (including bonuses, tips, etc.); the brokers that have 1-4 years of experience make over $44.000; top-level professionals with 10-19 years of experience can make $72.500 per year and even more.

How much does it cost to become a mortgage broker?

You would need to obtain a license, in order to become a mortgage broker.

The minimum educational requirement includes having a high school diploma; however, a college degree can be helpful, especially, if you want to start your own business.

You would also need to complete a pre-licensure program; the application fee for the National Mortgage License System exam is $400.

All-in-all, the required coursework and exam can cost up to $1.500.

In case you decide to start your own business, you would have to consider establishing a business entity and registering it (that can cost you $300-$500).

Other things you would have to think about include office rent that can cost you around $1000 per month.

What is the demand for mortgage brokers?

Between 2014 and 2024, the mortgage broker job market is expected to grow by 8% in the United States, which is close to the national average (according to the Bureau of Labor Statistics).

The industry certainly does depend on the overall state of the economy in the country.

In recent years, there have been more and more people looking to buy homes.

The mortgage brokers with plenty of experience and an extensive network of contacts will have the best job prospects.

How long does it take to become a mortgage broker?

You would have to spend 20 hours on a pre-licensure mortgage broker class.

After completing the course, you would be ready to pass the National Mortgage License System test.

You would need some time to register and establish your mortgage brokerage; moreover, you should take your time to build relationships with real estate agents.

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