Becoming a mortgage broker is a great way to take advantage of the booming real estate industry without having to show houses around the clock. Even after purchasing mortgage broker insurance, brokers earn more than real estate agents do by using their skills and connections to pair up homebuyers with the best lenders.
If you are interested in making this career move, here is how to become a mortgage broker in six steps.
1. Take a Class
You do not need a college degree, but you must take special classes to qualify for a mortgage broker license. There are many online and in-person options for this training but be sure the National Mortgage License System endorses whatever course you choose. Requirements vary by state, and some will even wave the need for training if you took real estate classes in college.
2. Pass a Test
The Secure and Fair Enforcement for Mortgage Licensing Act of 2008 mandated that all mortgage brokers must pass a test overseen by the NMLS. This exam assesses your knowledge of the following topics:
- Federal mortgage-related laws
- Uniform state content
- General mortgage knowledge
- Mortgage loan origination activities
- Ethics in lending
3. Make it Official
Establishing a brokerage is slightly more complicated than setting up other types of businesses, and you may or may not have the choice of using a purely online location. Laws vary across the United States, but be prepared to establish the following items for your company before filling out forms to register it with the state authority:
- Name
- Structure, such as LLC or partnership
- Location
- Employer identification number
- List of any executives other than you
4. Get Bonded
A mortgage broker bond is a legally binding form of credit that protects your clients from any potential mistakes you might make when doing your new job. Even if you don't anticipate needing this protection, being bonded satisfies state requirements for licensing, increases customer confidence, and generates new business. Check how much your state requires, and then shop around among providers.
5. Apply for a License
Now that you have met all the requirements, you can finally apply for your mortgage broker license. Be prepared to submit your bond certificate and a fee along with your application and for the state to run a criminal background check. Most states issue a license for one year, with a stipulation of continuing education credits for renewal.
6. Buy Mortgage Broker Insurance
After studying hard and jumping through so many hoops, protecting your new business’s financial future is imperative. There are many risks associated with the real estate industry, and for each risk, there is a specialized type of insurance to minimize it. Talk to your insurance agent about which policies are right for you.
About Axis Insurance
At Axis Insurance Services, we aim to help our customers identify their exposures and protect themselves. Founded in 1999, we offer insurance programs to a wide variety of professionals and industries including attorneys, real estate, healthcare, architects, and more, and also have a wholesale division. We pride ourselves on offering flexible insurance coverage tailored specifically to each customer’s needs. To learn more about our solutions, contact us at (877) 787-5258 to speak with one of our professionals.
