Starting a mortgage brokerage? You’re certainly getting into an industry that’s thriving! Over the next 5 years, the broker market for loan origination is expected to take 56 percent of the market share.
As a mortgage loan officer (MLO) in a booming market, your new business’s chances of success are greater now than they were at any time over the past decade.
But that doesn’t mean success is a given. While the total number of loans originated is expected to increase, that doesn’t guarantee your brokerage will be tagged for origination.
Fifty percent of small businesses fail within the first 5 years. Don’t let yours fall into this category. Here are some tips to follow for your first 6 months in operations.
Be legitimate when starting a mortgage brokerage
Starting a mortgage brokerage is just like starting any other business. In order to operate, you need to be properly licensed and formed in whichever state you operate. Seeing as you will be dealing with clients who are making a large investment, you may be asked for these credentials on occasion.
The steps you will need to take to legitimize your business are:
– Take a pre-licensure mortgage broker course through the NMLS
– Pass the SAFE Mortgage Loan Originator test with a score of at least a 75%
– Attain your state licensure
– Properly form your business—LLC, Corporation, Partnership, etc.
Find your niche and build clientele
Once your business has been established, the next step in starting your mortgage brokerage is to begin building your clientele. While it might be easy to advertise your services everywhere, the best decision for long-term growth is to find a niche.
Winning deals as an MLO involves two things:
– Display expertise
– Be personable
As stated earlier, your clients will be people making one of the biggest investments of their lifetime. Be empathetic but bring a sense of confidence as well.
Of course, referrals can give you a boost as well. And we’ve written an informative article on how to do so—you can find it here.
Invest in the right tools
Invest in your future. Starting a mortgage brokerage is a big step and one that can lead you to great financial success. But this is only attainable if you treat your business as seriously as your competitors. There will be plenty of other MLOs competing for your business.
One way to make sure you remain competitive is to continually further your knowledge. Take courses and attain certifications when possible. Stay up to date on news in the industry—and in your niche especially—and share that news with your network.
You also need to invest in the proper tools for the job. Starting a mortgage brokerage means dealing with lots of processes and paperwork. The back-end processes can take up most of your time if you allow it.
If you invest in the right tools, such as automation tools that free up time in your workday, you will have more time to do what it is you intended to do when forming your business: originate loans.
Congratulations on starting a mortgage brokerage!
Whether you’re thinking about starting a mortgage brokerage or have already formed one, congratulations on your efforts and welcome to the community.
If you need help with automation tools, we’re the partner for you. Schedule a demo today to see just how effective our platform can be to your business.