How to Become a Mortgage Broker; The Right Steps

mortgage

 

Mortgage banks and other financial institutions historically always sold their mortgages. Recently, however, the mortgage market has become increasingly fierce, forcing intending homeowners to look towards other non-traditional options. This led to the rise of mortgage brokers who help lenders acquire suitable loans at reasonable interest rates. So how do you become a mortgage broker? First, let's learn the duties of an agent. 

What do mortgage brokers do?

1. Market Research

Mortgage brokers constantly scour the market, searching for the best mortgage offers and equally onboarding clients looking to obtain mortgage loans.

2. Intermediary

Mortgage brokers serve as an intermediary between lenders and borrowers. In a world where homeownership has become fierce, mortgage brokers carry out the vital job of finding the best deals for lenders and borrowers.

3. Mortgage acquiesce

After searching the market and matching lenders to buyers, mortgage brokers are responsible for originating, processing, and finalizing the entire selling process and acquiring the mortgage.

4. Consultancy

Mortgage brokers perform general mortgage consultancy duties such as educating lenders about different loan options and features, vetting all required paperwork, supplying necessary financial and mortgage-related information to clients.

 

Requirements

Before you apply to become a mortgage broker, there are specific requirements you need to have. They are as follows:

1. Minimum of a high school diploma

An intending mortgage broker must have at least a high school diploma to qualify for the professional certification. If you don’t have a diploma, you can opt for the General Educational Development Certificate, an acceptable substitute if you are in America or Canada.

2. Nationwide Mortgage Licensing System (NMLS) Test

After fulfilling the high school minimum requirement, the next requirement is the NMLS state. Also known as the Safe Mortgage Loan Originator Test is a state-mandated test required before any applicant is given a mortgage brokerage license. The minimum pass score is 75%.

3. Mortgage Broker Bond

The third requirement in your journey to becoming a mortgage broker is a broker bond. A mortgage bond is a state-required debt instrument meant to protect your clients in the case of any legal violations. Requirements for obtaining a broker bond varies by state, so endeavor to determine which conditions are demanded by your state of choice.

4. Mortgage Broker License

After getting a diploma, passing your NMLS test, and acquiring a broker bond, then you are ready to apply for a license. A mortgage license will be issued to you after you file for your business registration. As soon as your license registration is acquired, you are now a registered, licensed mortgage broker.

 

How to Become a Mortgage Broker

There may be certain slight variations depending on your state of residence or state of intended registration; becoming a licensed mortgage broker, however, requires the following process:

1. Prepare for your License test

The first step towards becoming a mortgage broker is preparing for your NMLS test. The NMLS test also referred to as a Mortgage Loan Originator (MLO) test, is the essential requirement for applying for a license. The test covers areas such as finance and States' regulations. It runs for 3 hours.

2. Pass your NMLS test

After taking the NMLS test, you must pass to proceed with your application. The minimum pass score is 75%. Failure to make the pass score in the first four attempts means you have to wait 30 days after every effort. If you fail to make the pass mark by the fourth try, then the waiting period becomes six months.

3. Obtain a broker bond

The next step after passing your NMLS test is to obtain a broker bond. Mortgage broker bonds are mandated requirements to protect your clients if you violate any regulations that may cause them to lose money. Requirements vary by state, but broker bonds usually are expected to be obtained for every state you intend to conduct business.

4. File for registration

The next step is filing for your business registration after obtaining all your basic requirements. States specific requirements differ, but standard registration requirements include business name, location (online or physical), copy of all necessary documents, mortgage bond certificate, etc. Application may take between 2-4weeks, but as soon as the process is completed, you will receive your license, and you can start practicing as a mortgage broker.

5. Renew license

Obtaining a business license is not enough to keep your business running. You must stay updated about new regulations regarding mortgage brokerage in your state. You must also renew your license every year to stay in business.

Presently, the mortgage market is highly competitive. Homes are scarce and therefore expensive. Mortgage brokers go a few steps further than traditional lenders by helping borrowers find the best deals, thereby saving time and money. This made them highly sought after and will remain so until the millions of Americans searching for homes find the best fit. If you need a reliable mortgage agent today, contact us here