A professional mortgage broker, essentially, acts as an intermediary between a prospective home buyer and a lending institution. The broker works with the buyer to find the best mortgage deal possible. For this service, the broker receives a fee or commission, and the buyer is able to purchase the home of his or her dreams.
This industry is relatively new and still in the growth stages. In 1987, mortgage brokers represented 20 percent of all loans. By 2002, that number had increased to an astonishing 60 percent. This is most likely reflective of the fact that, while owning a home is a big part of the American Dream, for many people, that dream is more difficult to realize due to poor credit or no credit on their part. People need assistance getting the money to buy a house and mortgage brokers fill that need.
A mortgage broker differs from a mortgage banker (or loan officer) in that a mortgage banker loans money from his or her own institution, while the broker solicits lending institutions and finance companies to find the money for his or her customer. The banker works for the bank; the broker can either work for a brokerage firm or be self-employed. The broker works with numerous sources, sometimes as many as fifty at a time. Often, mortgage brokers are also real estate brokers and offer potential buyers a package deal.
Does this sound interesting? Consider the qualifications that are required for a good mortgage broker. You must have excellent people skills. A sales or marketing background is helpful, though not required. Having the ability to speak more than one language may also be important depending on your locale. You also need excellent written and verbal communication skills.
While you don’t have to be a mathematical genius, you do need to be adept at using a computer, since much of the job entails searching for new sources of funding and quickly running interest rates, credit reports, and qualifying information. A college degree is not essential but is definitely a plus. Some type of banking background is also helpful, but, again, not required. The main requirement is drive and a desire to help people, while at the same time making money.
Mortgage brokers must be available to work nights and weekends when their customers are available, similar to a real estate agent. They must also be organized and have the ability to multi-task, since, frequently, they will be working with more than one customer at a time. A mortgage broker must also have a sense of urgency. A buyer may not have a lot of time, and the broker needs to get the money quickly so that the buyer will not lose the deal. The broker’s sense of urgency must match the customer’s.
In 45 states, mortgage brokers are required to be licensed. States also may dictate educational requirements and what types of insurances are required. Brokers are also subject to a variety of federal regulations and are bound a Quality Control standard. Additionally, members of the National Association of Mortgage Brokers (NAMB) are held to a Code of Ethics.
Mortgage brokers are normally paid on a commission basis. The commission reflects the broker’s fee as well as the value of the loan. Experienced brokers can earn well over $100,000 per year, and these numbers are expected to escalate. There is definitely money to be made in this field.
Interested? The question, then, is how to get started. The answer is, get started! The best way to find a job as a mortgage broker is to go directly to a mortgage brokerage firm and apply. Most firms offer on-the-job training and will sponsor trainees on the licensing exam. Do not expect to get rich at first, however. These training programs should be viewed as just thatâ€¦ training for which you do not have to pay. You must also be willing to do telemarketing, following up leads, as part of the training.
Make sure the brokerage is properly licensed and try to get all the specifics in writing. Look for the company’s credentials and check to see that the people with whom you will be working are licensed as well. Here are some questions to ask during your interview:
- When can I expect to see some commissions?
- What is the split (the amount the house or company takes and what you can expect)?
- Does the company pay for additional training and seminars?
- How will I get my referrals?
- Must I generate my own leads?
Don’t expect to get rich too quickly, but, with time and perseverance, you should be able to make a living at being a mortgage broker within the first year. Your income will directly reflect the amount of effort you want to put into the job. Eventually, once you are fully licensed, you will be able to go out on your own and have your own business.