How to become a mortgage broker?

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    Jordan Moore
    Team StellarFi

    Mortgage brokers mediate between lenders and borrowers and are responsible for finding the best loan product for the borrower by comparing different lenders. You can become a mortgage broker if you are good with numbers and are interested in the real estate industry. 

    According to Indeed, mortgage brokers in the United States have an average base salary of $170,000, but the range is between $79,000 and $368,000 a year. At a time, a mortgage broker deals with over 30 lenders to help their borrowers find the right fit for them.

    • Education: You don’t need a college degree to qualify to become a mortgage broker. But you do need at least a high school degree or pass the General Educational Development (GED) test. You qualify for a GED diploma by scoring 145 in its four exams. Though not required, having a two- or four-year degree in finance, accounting, marketing, economics, or business administration can help. 
    • Licensing: You need to get an individual license from the Nationwide Multi-State Licensing System and Registry (NMLS). The NMLS has a list of approved mortgage broker schools where you can get your 20-hour mandatory training course. The training costs between $200-$300 and you can also take additional courses to improve your knowledge. The subjects include federal regulations and laws (three hours); ethics and fraud (three hours); non-traditional mortgage lending standards (two hours); and electives on mortgage origination (12 hours).
    • Pass the NMLS exam: After taking the course, you need to take the NMLS exams (also known as the Secure and Fair Enforcement Licensing Act, or SAFE exam) which will test you in five categories — federal law, general knowledge of mortgage origination, ethics, loan origination activities, and uniform state content. The test also includes the uniform state content (UST) in the national test which contains 25 questions testing spate-specific facts and policies. 

    You need at least 75% on the standard and UST parts of the test to pass the exam. The results are declared within 72 hours. You need to wait for 30 days before retaking the test in case you fail it. 

    • Establish and register your brokerage as a legal business: You need to follow all the steps for registration according to the guidelines of the U.S. Small Business Administration (SBA). 
    • Meet the state licensing standards and get a surety bond: Getting a business license can have varying costs depending on the state but it can cost anywhere between $1,000-$2,000 for the initial application and annual renewal. The surety bond assures clients that you’ll follow the mandated trade standards.

    Regular brokerage training to maintain your license: You can begin practicing in your state of registration by building and growing contacts with real estate agents, lenders, and other entities. You also need to renew your license annually and get additional certifications to keep yourself updated about the latest skills and knowledge in the field.

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StellarFinance, Inc. and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

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