How to Become a Mortgage Broker in 5 Steps
Research what it takes to become a mortgage broker. Learn about education requirements, licensure, training and certification options to find out if this is the career for you.
What Does a Mortgage Broker Do?
Individuals and companies rely on mortgage brokers to provide them with loan options that they can afford in order to buy homes, businesses, and other properties. Generally, mortgage brokers work to develop relationships with real estate agents, who then refer them clients who are in need of a loan to purchase a property. Mortgage brokers take into account an individual's credit history, their employment status, and income when deciding whether to approve them for a loan and the amount of the loan. Take a look at the following chart for an overview of how to enter this field.
<table border="1"><tr><td> <b>Education Required</b> </td><td> High school diploma minimum, vocational certificate or bachelor's degree preferred</td></tr>
<tr><td> <b>Education Field of Study</b> </td><td> Business, economics, finance</td></tr>
<tr><td> <b>Other Requirements</b> </td><td>Licensure is required, related work experience is recommended, certification is voluntary</td></tr>
<tr><td> <b>Key Responsibilities</b></td><td> Advise clients on selecting loans from various lenders, process loan applications, have in-depth understanding of government regulations concerning real estate financing</td></tr>
<tr><td> <b>Job Growth (2020-2030)</b> </td><td>1% growth <i>(for all loan officers)</i> <br/> 4% growth <i>(for all real estate brokers and sales agents)</i>*</td></tr>
<tr><td> <b>Median Salary (2021)</b></td><td> $58,304 (for mortgage brokers)**</td></tr>
</table><p><i>Sources: *U.S. Bureau of Labor Statistics, **PayScale.com</i>
</p><h2 id="section---WhatIsAMortgageBroker">What is a Mortgage Broker?</h2><p>Mortgage brokers can be individuals or companies who act as intermediaries between consumers and lenders for mortgage transactions. Mortgage brokers have relationships with banks and lending companies, but they are not direct employees. Most states require those wishing to work in this field to gain licensure.
</p><h3 id="section---Step1ResearchMortgageBrokerCareerDuties">Step 1: Research Mortgage Broker Career Duties</h3><p>Professionals are usually residential mortgage brokers who work with individuals or commercial mortgage brokers who work with companies solely on commission. Your role in either specialization would be to advise clients on selecting loans from various lenders and processing loan applications. Processing loan applications usually involve obtaining clients' credit reports or financial statements and verifying income and assets. You also need to have in-depth understanding of government regulations concerning real estate financing to guide clients in making purchase decisions. Frequent travel to client and lender locations is also a common function of this job.
</p><h3 id="section---Step2ReceiveEducation">Step 2: Receive Education</h3><p>A high school diploma or its equivalent is usually the minimum education requirement for mortgage brokers, according to the U.S. Bureau of Labor Statistics (BLS). However, many employers hire college graduates because job duties involve complex legal matters (<i>www.bls.gov</i>).
</p><p>Specific courses in mortgage and real estate are usually available though a certificate program such as mortgage loan origination or real estate finance and investment. You may also consider a bachelor's degree in business, economics or finance that covers subjects such as business law and marketing.
</p><h3 id="section---Step3GainExperience">Step 3: Gain Experience</h3><p>You can prepare for a mortgage broker career by starting out as a loan officer or real estate agent. In these positions, you can learn how to gather and analyze financial documents, use loan-underwriting software and interpret real estate market trends. According to the BLS, loan officer and real estate jobs are expected to increase by 1% and 4% respectively from 2020 to 2030. This job growth can provide you with more opportunities to begin your career in mortgage industry.
</p><h3 id="section---Step4GetLicensedInYourState">Step 4: Get Licensed in Your State</h3><p>According to the Nationwide Mortgage Licensing System (NMLS), you must be a Licensed Mortgage Loan Originator to accept or negotiate residential loan applications for compensation (<i>www. mortgage.nationwidelicensingsystem.org</i>). National requirements to obtain this licensure include no prior revoked mortgage originator license, no felonies within the past seven years and a score of 75% or better on the NMLS exam. If you're operating a sole proprietorship, you must obtain a mortgage broker license. Specific requirements for these licenses may vary by state.
</p><h3 id="section---Step5ConsiderCertification">Step 5: Consider Certification</h3><p>You can obtain voluntary certifications through the National Association of Mortgage Brokers (NAMB). There are three levels of certification offered that include the General Mortgage Associate: entry-level (Certified Residential Mortgage Specialist), mid-level (Certified Mortgage Consultant) and advanced.
</p><p>Candidates for entry- and mid-level certification exams must meet work experience and other qualification. Passing a multiple-choice exam is required for all of these certifications. Each certification is valid for three years.
</p><h2 id="section---WhatAreSomeRelatedAlternativeCareers">What Are Some Related Alternative Careers?</h2><p>Individuals may also be interested in a career in some type of sales. Options include insurance sales, real estate sales, or advertising sales. If they have a particular interest in finance, they may want to consider jobs as financial analysts, personal financial advisors, or financial managers. For those who are particularly interested in real estate, they could also become real estate assessors and appraisers.</p>