How to Be a Mortgage Broker
There is a very bright future ahead for mortgage brokers, which is why a good number of people are seeking to become involved in the profession. In addition to the monetary rewards of being a broker (salary between $60,000 and $150,000), you can have the satisfaction of knowing that you’re helping people to find the right home for themselves and their families.
Job satisfaction is often cited as one of the most compelling reasons for pursuing a particular career, so this aspect of the profession amounts to much more than a temporary good feeling. If you are even somewhat interested in becoming a mortgage broker, you can review the following steps which describe the process of becoming a professional. It is not an especially difficult process to undergo, so if you’re serious about the profession, it won’t be too hard to achieve your goal.
STEPS to How To Be A Mortgage Broker:
1- Take the required training
The first requirement of becoming a mortgage broker is to earn at least a high school diploma or the GED equivalent, and if you have a college degree in business, finance, or economics, you’ll be a little further ahead in the game. You can enhance your knowledge of the industry by taking courses from the National Association of Mortgage Brokers. Before you go out on your own, it’s highly recommended that you first acquire between three and five years of experience with an established mortgage company, so that you can gain the knowledge and experience necessary for your personal success.
2 – Pass the SMLO test
The Safe Mortgage Loan Originator (SMLO) test is a two-part test consisting of a national version and a state version. The national test is standard, and most states also require applicants to pass an additional test which focuses on rules and regulations specific to the particular state. You will need to score at least 75% on both tests, and you’ll have to pay a fee of $69 for the state test, plus $110 for the national test.
3 – Get registered
In order to apply for a license as a broker, you have to have an established business entity, and you will need to decide what type of business you want to register as. The most common business entity types are sole proprietorship, some kind of partnership, a corporation, and a limited liability company. You’ll also need to acquire and Employer Identification Number (EIN) from the IRS, so that you’ll have the capability of hiring employees in the future, should you choose to do so.
4 – Apply for a license
The next step is to complete your licensing application and have it submitted to the Nationwide Mortgage Licensing System (NMLS), following all state requirements for your particular state. Not all states require that applicants be residents of their states, so this is something you’ll need to check out. Also, some states require that you have a physical office or workplace from which to conduct business, while others have no such restrictions, and you could conduct your business strictly from an online platform.
5 – Obtain your mortgage broker bond
During the licensing process, almost all mortgage professionals will need to provide a broker bond, which provides additional security for customers of the broker, and for the state itself. The purpose of being properly bonded like this is to ensure that professionals in the business will abide by the laws governing the industry in their state, so that customers have some kind of guarantee of competence and knowledge from their broker. The amount of the bond necessary varies from state to state, and it can be anywhere from $20,000 on up to $100,000 and beyond. [Surety by NFP wants to help you achieve your goal of learning how to be a mortgage broker. Let us help you with the bonding part! We can help you with your bond in all states. Easiest bonding process in the industry. Call us, if you have any questions, or you can apply in a minute on our main website.]
6 – Grow your professional network
After you’ve acquired your bond and state license, it’s time to work on developing your contacts and your network of professional colleagues. It’s a good idea to include lenders among these connections, along with other real estate professionals. Attend industry events as often as you can, and reach out to real estate professionals both locally and out of your immediate area.
7 – Choose the right software
When you have a very small operation, you may not need computer software to keep it all organized. However, since the whole idea is to grow your business and become as large as possible, you might as well start out using a good software program so that you can become very familiar with it, and so you can achieve a good state of organization right from the outset. Some software programs are especially helpful, because they include components for customer support and for marketing and advertising. You would also benefit by being able to use the analytics component of a really good software program.
8 – Take continuing education
You shouldn’t get into the mindset of thinking that once you’ve been licensed and you are conducting business, that your education in the field is a thing of the past. It’s a good idea to take continuing education classes throughout your career, so that you can stay abreast of industry trends and developments, as well as satisfying any state regulations regarding mortgage brokering. Many states require eight hours of training annually so that you can maintain your state license, and so that you can keep updated on professional standards, as well as any new legal standards which have been enacted.
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