A mortgage broker at Steve Wilcox W/Primary Residential Mortgage, Inc. is a licensed professional who helps you find a loan that suits your needs. They are knowledgeable of lending laws and lender guidelines and are 100 percent vested in counseling, structuring, and closing your loan.
A mortgage broker has access to many different lenders and loan officers, allowing them to recommend the best loan programs for your specific circumstances. They are also able to compare rates and fees to ensure you’re getting the best deal.
Mortgage brokers work as intermediaries between borrowers and lenders. They collect information about a borrower, such as income, assets, and employment data, and then match them with a lender that will offer the best mortgage terms for the home buyer. Mortgage brokers can either be part of a mortgage brokerage firm or work as independent contractors. This career offers flexibility and job satisfaction that may not be found in many other industries.
A mortgage broker is not required to have a degree, though many choose to earn one in order to strengthen their position in the industry and increase their opportunities for career advancement. A bachelor’s degree in finance, accounting, or business management will help a prospective mortgage broker learn important skills such as sales, taxation, and banking regulations that will be useful in their careers.
After completing a degree program, aspiring mortgage brokers will need to take the National Mortgage Licensing System (NMLS) pre-licensing exam. This 20-hour class will review federal and state laws that govern mortgage lending and prepare the student for the licensing test.
Once a mortgage broker has obtained their license, they can begin working for clients. However, most brokers will gain valuable experience by working as loan officers for a bank before starting their own mortgage brokerage firm. This will give them a strong understanding of the inner workings of banks during the mortgage approval process and prepare them to better serve their own clients.
Before a mortgage broker accepts a client, they should make sure to ask the potential client about their needs. This will allow the mortgage broker to explain what they can and cannot do for the client and ensure that the client understands what their services entail.
Mortgage brokers often work on commission, which means that they are eligible to receive a significant amount of money only when the mortgage loan closes. As a result, mortgage brokers must be motivated by the desire to provide high-quality service to their clients. They should also be aware of the competition in their area and keep up-to-date on the latest trends in the mortgage industry.
Licenses and Certifications
To work as a mortgage broker, you’ll need to fulfill state laws and regulations. Most states require you to complete pre-licensing courses, pass a national mortgage licensing exam, and obtain a license fee and bond. You must also register your business with your state. Some registration requirements include registering your firm name, securing an employer identification number (EIN), and establishing a legal structure like an LLC or an S or C corporation.
Before taking the exam, you should study extensively to ensure you know the national mortgage rules and regulations. You should also be familiar with current real estate market trends and practices. You can use a variety of resources, including books and online training courses, to prepare for the test. The Mortgage Loan Originator Test is broken down into seven parts that test your knowledge of mortgage lending, state regulations, best practices, and more. The test is computer-based, and you must answer 125 questions correctly to pass.
If you do not pass the test, your license application will be withdrawn. You’ll then have to retake the exam and submit additional materials, such as a new license fee and documentation. The length of time you have to wait before retaking the test will vary by state.
Once you’ve successfully passed the licensing exam, your next step is to find employment or start your own mortgage brokerage. If you choose to open your own firm, consider creating a professional home office to be more productive and make a positive impression on your clients. You may also need to register your business with the state and submit additional information, such as a business plan and a list of executive or managerial staff.
To continue advancing in the mortgage lending industry, it’s important to participate in continuing education classes each year. You can also join professional organizations and stay in contact with colleagues to stay up-to-date on mortgage lending developments. If you want to maintain your licensure, you must submit proof of continuing education credits before you can renew your license. Using a tool like Harbor Compliance License Manager can streamline the process and help you meet state license requirements more quickly.
Experience
Mortgage brokers need to have a lot of experience in the mortgage industry. They need to be able to understand the changing trends and rules that come into play as they work in the field. They also need to be able to market their services effectively. They can do this by offering free consultations to potential clients. This will give them a chance to get a feel for the mortgage broker and see if they would be a good fit for their needs.
One of the biggest things that mortgage brokers do is help clients find the right loan product and lender for them. They have a lot of information at their disposal, and they can often get better rates than a borrower could on their own. Mortgage brokers can find lenders that are more likely to work with specific types of borrowers (for example, if you’re a freelancer who works on a contract basis and may need a lender who is familiar with this type of arrangement).
They can also evaluate the borrowing power of a client by looking at their credit score, assets owned, and yearly income. They can then do the legwork to make sure that the loan is safe for both parties.
Once a client has found the mortgage that is best for them, they will work with the broker to fill out all of the necessary paperwork and submit it to the appropriate people. Then they will follow up with the client to see how the application is going and answer any questions that the client may have.
The final step is to get the loan approved and funded. This requires the use of critical thinking skills as well as communication with a variety of different people throughout the process. Once the loan has been approved and funded, the mortgage broker is eligible to receive a fee for their services.
Mortgage brokers are typically paid either by the lender or by the borrower, but never both. The Dodd-Frank Act limits how much mortgage brokers can charge for their services, and most are charged 1% or less of the total loan amount.
Fees
Generally, mortgage brokers earn commissions for every loan they close. The amount of these fees varies and may be paid by either the borrower or lender, but typically ranges from 0.50% to 2.75 percent of the loan’s principal. The borrower fee is usually paid at closing, while the lender commission is rolled into the cost of the loan. Brokers should provide their fee structure upfront and throughout the process.
Mortgage brokers can be very helpful for homebuyers who want to save time by having someone do the legwork for them. However, there are many other ways to find a home loan, including working with lenders directly and using online tools that help buyers compile documentation and navigate the loan process.
As with any type of financial transaction, borrowers should carefully evaluate the pros and cons of mortgage brokers. It’s important to choose a fully licensed and insured mortgage broker who has experience handling your type of loan. Borrowers should also use platforms like the Nationwide Multistate Licensing System and Registry consumer access website and the Better Business Bureau to determine whether the broker has self-reported any disciplinary issues.
In some cases, mortgage brokers may be able to get borrowers access to loans that aren’t advertised on the market. This can be a benefit for homebuyers with less-than-stellar credit, unique borrowing situations such as owning a business, or who otherwise aren’t seeing mortgages that fit their needs.
