A mortgage broker is also known as a loan officer and this field is growing very rapidly. According to the Bureau of Labor Statistics (BLS), in the USA the demand for a mortgage broker will grow more than 11% between 2016 and 2026! This demand rate is much higher than the national average for other career opportunities. So, it is quite clear that a mortgage broker is an excellent career option for people who want to build their career in the finance field!
- The main duty of a mortgage lender is to negotiate the terms of a mortgage between a client and the lender
- If you want to become a mortgage broker then you have to get the required licenses and meet all state and federal requirements.
- A mortgage broker will do all the paper works for you that will approve your loan application
- If you want to become a mortgage broker then you have to complete a 20-hour pre-licensure class through the National Mortgage Licensing System (NMLS)
- A mortgage broker charges a fee for their services and it can be 1% or 2% of the loan amount
What is a Mortgage Broker?
A mortgage broker is like a middleman who helps a borrower and the lender to find a suitable deal. The main duty of a mortgage lender is to negotiate the terms of a mortgage between a client and the lender. Here, the lender can be a bank financial institute or a personal investor. Typically, a mortgage broker works with homeowners and homebuyers.
They research various types of loan options from multiple lenders and help homeowners or homebuyers find the best mortgage rate. Like any independent advisers, mortgage broker mortgage brokers charge a commission for their services. If you want to become a mortgage broker then you have to get the required licenses and meet all state and federal requirements. You can work independently or for an agency.
What does a Mortgage Broker Do?
If you apply for a loan by yourself then you have to go through lots of paper works and you also have to gather the necessary documentation. Then you have to contact the bank or the financial institute about the loan. So, this is a lengthy process and it will take lots of time. This is where a mortgage broker will come in handy. If you apply for a mortgage through a broker then the broker can save lots of your time by doing all the work for you.
A mortgage broker will do all the paper works for you that will approve your loan application. One key difference between a loan officer and a mortgage broker is, that a mortgage broker works on behalf of the buyer. A mortgage broker will compare loan types, offers, and interest rates and help you pick the best offer. Moreover, the broker will do the negotiation work on behalf of you with the lender. Applying for a mortgage to buy a home involves lots of legal work but if you apply through a broker then the broker will take care of all your legal work.
Usually, mortgage brokers work in both residential and commercial real estate. Moreover, they are also well-informed about the housing market so, you can expect to get the best deal for your house! Some key responsibilities of a mortgage broker are –
- Establish a professional relationship with the lenders
- Collect various documents, credit reports, and loan applications, and do employment verification for the homebuyers/homeowners
- Apply for a mortgage on behalf of the client
- Compare interest rates, mortgage fees, and other costs and offer the best deal to the borrower
- Explaining legal and repayment details of a loan
- Make sure that the terms and conditions of the mortgage are compliant with all relevant regulations and laws
- Complete all the closing paperwork for a mortgage
How to Become a Mortgage Broker?
If you want to become a mortgage broker then you have to be educated, licensed, and a financial professional. There is no particular educational requirement but you must have a high school diploma or GED to get a license. Having an undergraduate degree in fields like accounting, finance, business administration, etc. will give you an upper hand in this field.
Moreover, if you want to become a mortgage broker then you have to complete a 20-hour pre-licensure class through the National Mortgage Licensing System (NMLS). This license program is available across the U.S. Once you complete this pre-licensure program, you will have a clear idea of federal and state laws regarding mortgages, various mortgage regulations, ethics of loan officers, and many more. After completing the 20-hour pre-licensure class, you have to pass the NMLS exam called the SAFE Mortgage Loan Originator Test. Without passing this exam, you won’t be able to become a mortgage broker. Moreover, you have to take yearly continuing education courses to keep your mortgage broker license current and valid.
Skills Require to Become a Mortgage Broker
To become a mortgage broker you must have a clear idea about the market, current loan options, housing trends, and mortgage interest rates. Apart from that, a mortgage broker should have some skills that will help him to complete the process of securing a loan for the client. Therefore, a mortgage broker must possess some of the following skills and qualities –
1. Customer Service
This is a very important skill because it will help you develop a healthy relationship with the borrower as well as the lender. Having a good relationship with the borrower will increase the chance of doing business with him/her. Therefore, you should have excellent customer service skills like good listing skills, being very responsive to phone calls and emails, good explanation skills, etc. Having good customer service skills will make the borrower feel more comfortable doing business with you.
2. Critical Thinking
As a mortgage broker, you must have critical thinking ability. This is because you will have to gather various information and statistics regarding several mortgage options and then analyze these statistics to find the best deal for the borrower. Having, a critical thinking ability will help you review all the documents and find the most viable option for the client.
3. Communication Skill
According to many financial experts, this is one of the most important skills a mortgage broker must-have. A mortgage process requires employment verifications, credit histories, and many other personal details. So, if you have good communication skills then you can easily get all the required information. Moreover, as a broker, you have to work with a variety of professionals therefore you need communication skills to correspond with all parties.
4. Negotiation Skill
This is another must-have skill for a broker because the main job of a mortgage broker is to negotiate a deal between the borrower and the lender. Here, the mortgage broker has to create a lender-borrower relationship that would last for years. You should keep in mind that a mortgage broker works as a bridge between the lender and the borrower so you have to make sure that both parties agree to common terms thanks to your excellent negotiation skill.
Average Salary of a Mortgage Broker
The average salary of a mortgage broker depends on quite a few things like the location, commission rate, mortgage amount, etc. Usually, a mortgage broker charges a fee for their services and in most cases, it is 1% or 2% of the loan amount. Sometimes a mortgage broker also receives a small fee from the lender but in most cases, the commission is paid by the borrower at closing. So, the earnings of a mortgage broker are commission-based and it totally depends on how many deals you have completed in a month. Other factors like years of experience, reputation, and the number of hours you put in also play a vital role in the amount you can earn as a mortgage broker. Below is some information collected from various online job sites that will give you a clear idea about the range of average earnings by mortgage brokers –
- Based on the 82 mortgage broker salary reports, Indeed stated that the nationwide average base salary for a mortgage broker is $77,731 per year and in some areas, it is a bit higher like $117,636 in New York City.
- PayScale analyzed 72 salary reports and puts the average salary of mortgage brokers at $58,304 per year. However, the actual salary range from $12,000 to $178,000 per year.
- According to Glassdoor, the average salary of a mortgage broker is $63,469 per year, and the actual salary range from $27,000 to $149,000.
A survey from ZipRecruiter showed that the average salary of a mortgage broker is $77,202 per year and it ranges from $20,000 to $152,000.
State wise Mortgage Broker Salary in the USA
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Is Mortgage Broker a Good Career?
If you consider the present career trend in the USA, then it is fair to say that a mortgage broker is a good career option in 2022. The demand for a mortgage broker is increasing rapidly so does the income range in this field. Moreover, there are also other benefits of working in the mortgage industry. Here, you will have multiple career paths; you can work with a bank or a financial institute or you can also work as an independent agent. Moreover, as a mortgage broker, you will have limitless earning potential. There is no limit on how many deals you can close in a month and your earnings are based on commission so you can earn as many as you can. Moreover, as a mortgage broker, you will have a flexible schedule and work-life balance.
FAQs about Is Mortgage Broker a Good Job
Is a mortgage broker a stressful job?
Yes, being a mortgage broker is a stressful job. Though there is no danger in this job but among all the non-dangerous jobs, a mortgage broker is the most stressful. One key reason is, that a mortgage broker is on call 24/7 though they earn through commission.
Can you make a lot of money as a mortgage broker?
Yes, it is possible to make lots of money as a mortgage broker. The earnings of a mortgage broker are commission-based and they get paid once the deal is completed. So, you can complete as many deals as you can in a month and earn money, there is no restriction!
How does a mortgage broker get paid? A mortgage broker gets paid through a fee or commission after the loan deal is completed. For example, if you complete a $500,000 mortgage deal and if your commission is 1% then you will earn $5000 from that deal!
Last Updated on November 3, 2022 by Magalie D.
Magalie D. is a Diploma holder in Public Administration & Management from McGill University of Canada. She shares management tips here in MGTBlog when she has nothing to do and gets some free time after working in a multinational company at Toronto.