How to Start a Mortgage Broker Business

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Owing to difficult economic conditions, and the rising real estate prices, most individuals and companies apply for mortgages in order to finance their purchases. Mortgages are usually granted by lenders (banks, or private lenders, etc), but in order to secure the loan, most parties take the help of a mortgage broker. Mortgage brokers are approached by those who are looking to apply for a mortgage, and serve as intermediaries between the aspiring real estate buyers and the lenders. In return for their services, mortgage brokers generally gain a commission as payment (this is usually a certain percentage of the loan amount). Building a mortgage broker business requires a thorough understanding of the real estate market and financial instruments, and if done right, can be a very lucrative venture.

  • The first step to starting a mortgage broker business is to get proper certification. Start by applying for and obtaining a mortgage broker’s license. In Canada, the requirements for this may vary according to which province you live in, so find out the specifications in your area, and ensure that you fulfil them, so you can be a certified mortgage broker. Generally, you will be required to have a bachelor’s degree or a diploma in finance or economics, in addition to certain accredited courses.
  •  Next, you should find a job with a mortgage broker or realtor, so you can gain some experience and learn the ropes before you start up your own mortgage broker business. Not only will you gain a deep understanding of the business, but exposure to certain situations will also enhance your practical knowledge.
  • Once you have the necessary experience, you are ready to begin your own business. Start by determining whether you will be dealing with loans for commercial real estate or residential real estate – both have their own lenders and different marketing approaches.
  • Draft a business plan, making sure you cover all the details. In addition to helping you obtain funding, this will also make sure you stay on track as far as the growth and development of your business is concerned.
  • You will now need to obtain funding for your business, and this should be enough to cover the cost of office space, insurance, office equipment, and living expenses for a period of up to six months. In addition, you will also need to register your mortgage broker business with the concerned authorities, by applying for a business license.
  • Select a location for your office (make sure it is an easy accessible one), and purchase all the equipment that is needed, like computers, telephones, printers, fax machines, etc. Moreover, you will also need to invest in liability insurance, to cover you in case you are sued.
  • Market and promote your mortgage broker business, in order to make your presence known, and draw in the clients. Finally, when you feel your business is comfortably poised to take-off, launch your mortgage broker business.
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