A mortgage broker is a certified contractor who acts as a middleman between homebuyers and lending institutions. As a broker, your main work is to assess your client’s credit background to connect them with the perfect lender for their financial needs.
You need to be knowledgeable enough to educate your customers on the loan process while also helping them save time and settle for the best rates. Here are four basic requirements you need to become a professional mortgage broker.
1. Take the Pre-Licensure Class
Regardless of the state in which you’re planning to conduct your business, you must be licensed. As an aspiring broker, you should consider taking a pre-licensure program covering crucial federal and state laws. Besides, you should meet specific educational guidelines like having your high school diploma or a college degree for advanced training.
This program also contains economic regulations concerning loan officer ethics and mortgages. You can access this 20-hour class and the official test at the National Mortgage Licensure System (NMLS).
2. NMLS Exams and Licensing
Once you’re done with the pre-license course, you need to sit for the NMLS exam and pass. This exam challenges your understanding of vital matters like state guidelines and general mortgage practices. In most states, the NMLS licensing fee is $1,500.
Generally, every aspiring broker takes the same national test. However, the paper has a state section unique to your area’s rules and regulations concerning mortgages. And the good thing about this test is that you can take it whenever you choose.
Just ensure that you complete it in less than three years after your application submission. Once you excel in it, i.e., by getting at least a 75% score, you can proceed to register your business. If you’re looking for a mortgage advisor Essex, work with trusted brokers like CLS Money, who offer complete mortgage packages.
3. Register and Establish Your Business
After completing all the required coursework and passing your exams, you can now register your business. Here, the requirements vary depending on which state you’re conducting your mortgage brokering industry. They may include:
- Creating your business name and location
- Establishing a business structure such as an LLC, S, or C corporation
- Securing an employer identification number (EIN)
With these details, you’ll then register your business through your state’s licensing authority. You’ll also need to get a mortgage broker bond. This bond ensures that you adhere to state regulations and protects your clients should you not observe the rules and regulations of operating in your state.
Besides, a mortgage broker bond improves your validity among potential clients, and most importantly, it’s a requirement to be licensed.
Keep in mind that your state can claim the bond if there’s a breach. The actual premium varies, depending on factors like your credit score, financials, and professional experience.
So, how can you secure a mortgage license? Typically, federal laws regulate the mortgage broker industry, but state laws will dictate the bond amount you need and the requirements you need to become licensed.
To get a bond, you can submit your application online, which the state will review for accuracy and completeness before approving it and sending you the license. At this point, you’re ready to get to work as a certified mortgage broker.
4. Continue Your Education
Once you receive your license, it’s your responsibility to keep it current and stay up-to-date with mortgage lending developments. Remember, this job demands constant attention to the ever-changing lending and real estate landscape.
So, you’ll have to pursue continuing education courses each year. You can either take online or in-person courses. This ensures that you give your clients the most recent mortgage loan information and do your job accurately.
To be a successful mortgage broker, you should also have self-discipline, be organized, and be persuasive. Your clients will want good deals, and your persuasion skills can help them achieve this. Additionally, you should have remarkable communication skills when dealing with clients to maintain integrity and professionalism. Learn to create relationships with several mortgage lenders so that you can present your clients with a variety of offers. Connecting with real estate agents and making a good reputation with each client you serve will also take your brokerage to new heights.