5 Steps For Becoming a Mortgage Broker and Jump Starting Your Career

by Sarah Williams Blogger, writer

Are you ready to start the path towards becoming a mortgage broker? Here's 5 steps you need to make in order to jump start your career.

Thinking about becoming a mortgage broker? The loan broker industry is making a comeback and the future looks bright.

If you have a knack for numbers and working with people, a career as a mortgage broker could be a good fit. Keep reading to discover the path to making it a reality.

What Does a Mortgage Broker Do?

A mortgage broker connects people who want to buy residential property with the best loan product for them. They don’t loan any money first-hand but serve as the middle-man between the borrower and the lender.

A mortgage broker handles things such as:

Qualification Requirements
Terms and Interest Rates
Counseling Consumers
Finding Appropriate Loan Products

An independent broker gets paid a commission for their services from the lender. There are also mortgage broker jobs with established brokerages. In these cases, salary and benefits are common.

become mortgage broker

How to Become a Mortgage Broker

Mortgage brokers have to follow federal and state regulations. Here are the five steps you’ll have to follow to earn a brokers license:

Step 1: Take Pre-Licensing Training

To start the mortgage broker training, you’ll need to have a high-school diploma or GED. You’ll have to take a 20-hour class through the National Mortgage Licensure System (NMLS) before attempting the mortgage broker license test. Topics covered in the course are:

Federal and State Laws (3-hours)
Loan Officer Ethics (3-hours)
Mortgage Origination (2-hours)
Electives (12-hours)

Check the NMLS website for class providers and locations in your state.

Step 2: Take the License Test

Once you’ve completed the pre-licensure class, you’ll take the SAFE Mortgage Loan Originator Test. There is a national portion as well as a state portion specific to where you live. The test is available all year round.

Cost for the national part is $110, and the state is $69. You’ll need a score of at least 75% to pass. Results are generally available within 72-hours of taking the test.

Again, more information on the license test is available through the NMLS website.

Step 3: Apply for Your License

Once meeting education and testing requirements, it’s time to register your official business entity with your state business licensing office. You’ll need to complete this step before applying for your mortgage broker license.

As part of the licensing application process you’re required to provide:

Fingerprints
FBI Criminal Background Check
Proof of Pre-license Education
Proof of Passing the SAFE Mortgage Loan Originator Test
A Credit Report via NMLS

In some states, you’ll also be required to post a mortgage broker bond. Make sure and read over your state requirements so that you don’t miss anything.

Once you receive your mortgage broker license, you’ll have to pay a yearly licensing renewal fee. Expect to pay $1,000 to $2,000 for the renewal fee. It varies from state-to-state.

Step 4: Start Working in the Industry

One of the first things you’ll want to do once you’re out in the field is to start building your contacts. To succeed you’ll need to relationships with lenders, real estate agents, and people wanting a home loan. Once you establish your connections and clients, hold on to them to build your portfolio.

Many mortgage brokers start out working for a brokerage firm before branching out in their own business. This allows them to earn trust and get experience.

Step 5: Continuing Education Classes

To stay qualified to hold your mortgage broker license and work in the industry, you’ll have to take continuing education classes each year. Eight hours of training are necessary for renewal. Training should include federal law, ethics, and mortgage lending classes.

Becoming a Mortgage Broker: What’s the Bottom Line?

The steps to take in becoming a mortgage broker can seem overwhelming at first glance. If you work on them one-by-one they are more doable. Once you’re working in the industry, it’ll all be worth it.

Need help building business connections and relationships? Contact us, we’d love to help!