(Updated February 2015)
Thinking you might like to pursue a career in the mortgage business? Then being a mortgage broker might be the right path for you. Successful mortgage brokers earn a pretty good living and often work independently, being their own boss. It can be an attractive alternative for someone who wants to work in the financial field but not for a big corporation.
The term "mortgage broker" is not just another name for a mortgage lender or loan officer. A mortgage broker doesn't make loans directly, but acts as an intermediary to help borrowers obtain mortgages from lenders.
Whereas a loan officer represents the bank or lender he or she works for, and will offer only the loan products they carry, a mortgage broker will often work with several dozen different lenders and be able to arrange loans with any of them. This means a mortgage broker can be more versatile than a single lender can be, matching clients to the lender and loan product that best serves their needs.
A mortgage broker can be a company that employs multiple agents who arrange mortgages for customers under the company's shingle, or a single individual working independently or for a firm.
Educational Requirements for Becoming a Mortgage Broker
There are no hard-and-fast requirements for becoming a mortgage broker, but you will need some type of training. Many brokers are former loan officers who decided to strike out on their own, or real estate agents who decided they wanted to try the financial side of things. A background in sales is often helpful.
Mortgage Brokers are licensed in the state in which they work, and each state has its own requirements for registration. Typically you will become educated on the various details of lending, as well as the many laws and regulations that you will be subject to. This information is passed along through classes, online, or self-study. You will then pass one more exams to become licensed in your state.
In many states the initial licensing is only the first step of the equation. Some states require different licenses, depending on the types of mortgages you will handle, and many states require continuing education from their mortgage brokers as well.
You can also obtain voluntary certification through the National Association of Mortgage Brokers (NAMB), which offers three levels. The General Mortgage Associate is an entry level certification that requires an examination. The Certified Residential Mortgage Specialist is a mid-level certificate for those with at least two years experience in the industry and the Certified Mortgage Consultant requires at least five years of experience and professional education.
Who Makes a Good Mortgage Broker?
Mortgage brokering is basically a sales career. If you cannot see yourself as a salesperson, this may not be the position for you. Even though sales-based, the fact that you will have customers at one of the most exciting points in their life means that your likely to be met with a little more enthusiasm than the average telemarketer.
Attention to detail, and the ability to think quickly on your feet are also important qualities in a mortgage broker. The typical mortgage broker will have 30 to 50 lending institutions that they deal with, and must be familiar with each. When a new client comes in shopping for a mortgage, you will need to access the situation, determine their strengths and weaknesses, and offer them a loan package that will best meet their needs.
Why Become a Mortgage Broker?
There are many reasons why becoming a mortgage broker makes sense. The median income is about $73,000, and that includes brokers who only work part-time.
A college degree is not absolutely necessary, so this can be an excellent career choice for the mature adult who never completed college. Even if you do have a college degree, you will still have to pass the same exams and licensing requirements as other candidates, so you will start on equal footing.
Many times you work as an independent contractor, brokering deals between mortgage lenders and potential home buyers. You can work from home, set your own hours, and not spend a fortune on wardrobe or commuting. There are opportunities for mortgage brokers to work as employees as well, if that is what you prefer.
To be sure, being a mortgage broker is more difficult than it used to be. The NAMB reports that its membership is down to 5,000 brokers, compared to 25,000 in 2006, at the height of the housing boom. Some major lenders no longer do business with mortgage brokers, choosing to handle all their loans through their own outlets. New lending regulations have also made being a mortgage broker less lucrative than it was a few years ago.
Still, there are opportunities out there for professional, hardworking and ethical mortgage brokers. The work is extremely flexible, but the downside is, you must be self disciplined. At the end of a busy day, there will still be calls and email to return. If you can manage these tasks, and develop a positive reputation, you may find that being a mortgage broker is a rewarding career to have.