How to Start a Mortgage Broker Business

Even in harsh economic times, companies and consumers apply for mortgages in order to secure real estate, and many do this with the help of mortgage brokers. A mortgage broker business acts as an intermediary between the party looking to buy real estate and the lender, oftentimes a bank, which can provide the funding for the real estate. A mortgage broker business gains a commission, usually a percentage of the loan amount, as payment for its services. If you have a talent for finances and strong entrepreneurial skills, read the steps to learn how to start a mortgage broker business.

Steps

1
Obtain your mortgage broker's license.
In most countries, you can suffice with passing a state exam if you have a bachelor's or comparable degree in a related subject such as economics or finances.
If you don't have a degree, you'll most likely be required to follow an accredited course before taking the state exam.

2
Work for a mortgage broker or realtor for at least a year before starting a mortgage broker business. This will teach you the ins and outs of the business and expose you to a number of different scenarios that will help build your practical knowledge of the field before starting a mortgage broker business.

3
Determine whether your business will focus on loans for residential real estate or commercial real estate. Each market segment requires a distinct marketing approach and contact with different lenders.

4
Construct a detailed business plan. This is not only invaluable when applying for the funding necessary to start a mortgage business, but also to refer to periodically to see if you're on track with the progression and growth of your business.

5
Obtain the necessary funding through a small business loan or private funding. Make sure your loan covers the costs of an office space, office equipment, insurance, and your living expenses for at least 6 months.

6
Apply for a business license by registering your mortgage broker business with your city.

7
Choose your office location. You'll need an office that is visible and accessible.

8
Buy the necessary office equipment, such as a computer, fax, printer, and telephone.

9
Purchase liability insurance. In the event that your mortgage broker business is sued, your insurance will cover the costs of a lawsuit.

10
Market your mortgage broker business.
If your target market consists of residential consumers, advertise in local publications and in residential real-estate magazines.
To reach business clients, advertise in commercial real-estate magazines, at your local chamber of commerce, and in trade magazines.

11
Open your mortgage broker business.