How to Become A Mortgage Broker - Getting Started
- Undertake the Education
- Join a Professional Association
- Obtain Lender Accreditation
What is a Mortgage Broker:
A Mortgage Broker helps borrowers by providing expert information and contacts, by 'comparison shopping' the many loans available in the marketplace on the borrowers behalf, and by facilitating a smooth transaction with little hassle to the borrowers. Brokers usually have access to a wide range of lenders and products, and should aim to source the best and most appropriate loan for their clients. A broker looks at the clients specific needs and circumstances, and should be able to interpret which type of loan best suits their clients and why.
A broker will look at the different angles of a loan application, and will present their client's application in it's most positive light, rather than just seeing whether it meets a checklist or not. Remember, the broker doesn't get paid until the loan settles so it's in your interest as a broker to make sure you are doing things ethically and within the lending policy set out by the lenders.
Good brokers will 'chase' approvals for their clients. Your service shouldn't stop with just submitting your loan, it should continue right up to and after settlement. As a broker you should be trying to minimize the legwork and hassle for your clients, and remain available to answer any questions they may have, even well after the loan settles. This way you can build a relationship with them, so that you are the first person they come to when they are thinking of refinancing etc.
For further information about getting started fill in the enquiry form
How to get Access to Lenders Products:
To act as a broker you will need to have access to a wide variety of lenders and products. Each lender usually has a minimum volume of loans that a broker/brokerage has to send them on a monthly basis in order for the broker/brokerage to have access to that lender. Let's say that a broker wants to have access and be able to originate loans for lender 'X', lender 'Y', and lender 'Z'. Lender 'X' might require the broker to submit or settle $1 million per month, lender 'Y' might want $1.5 million per month, and lender 'X' might want $2.5 million per month. This means that the broker/brokerage has to submit a total of $6 million dollars are month, just to have access to three lenders. Some brokers will do this, or will have agreements with one or two major institutions, and then use other institutions that don't have a minimum requirement to make up the numbers for marketing purposes.
To gain access to lots of lenders without having to worry about minimum volumes etc, some brokerages will enlisted the support of an 'aggregator'. The aggregator holds the agreements with the lenders, and individual brokers use the aggregator's agreements to submit their loans. The minimum volumes are met by the loans being submitted by all the brokers using the agreements of the aggregator. The aggregator may take a portion of the overall commission for providing the service or charge a fee. Aggregators may also provide other services such as software, training support, general business support and back office administration.
Most lending institutions will require you to have completed at minimum an accreditation with a Mortgage Industry Body. For more information on the various industry bodies available see our guide on Mortgage Industry Associations (MFAA) (FBAA). If you are operating in Western Australia or the Australian Capital Territory you will need to obtain a Finance Brokers Licence. For more information on the Western Australian licensing system, visit our WA Licencing page. For more information of the ACT licensing requirements, visit www.fairtrading.act.gov.au . Currently there are no licensing requirements for the rest of the country, however there are a number of legislative requirements you must operate to, depending on what state or territory you are operating in.
As of July 1st 2010, all individuals providing credit or credit advice must be registered with ASIC and a National Licencing scheme starts January 2011. Further inforomation is available on our Australian Credit Licence Page.
Conduct Research
Read as much as you can about mortgages, sales, and finance. There are numerous publications such as Your Mortgage Magazine and Mortgage Professional Australia, and Australian Broker that are available from most newsagents. Some other tips include:
Speak with other mortgage brokers to find out how they work and who they operate through. You can look in the yellow pages under Finance, Mortgage Finance, and Mortgage Brokers to get you started.
Speak to various lenders whose products you may wish to sell and find out about their individual accreditation processes.
Speak to the aggregator and franchise companies to see if any of them offer a model that suits your needs.
Consider a franchise or aggregator where they provide training and support.
You will need to achieve Certificate IV in Financial Services (Mortgage and Finance) FNS40804.
You will need to get professional indemnity insurance generally with a minimum of $1,000,000 per claim, and $2,000,000 in aggregate. Most of the industry bodies have relationships with various insurers, as do most aggregation or franchise groups.
Join an industry body such as the MFAA (Mortgage and Finance association of Australia) or the FBAA (Finance Brokers Association of Australia). Membership Guidelines are available on our website:
MFAA Membership Criteria
FBAA Membership CriteriaIf you are new to the industry you will also have to complete a Certificate IV in Financial Services (Mortgage Finance) FNS 40804. For more information on the Certificate IV course, please visit the 'Course Content' page of our website.
Get Experience. You may want to gain some experience in the industry before you go out on your own. You can do this by utilizing the services of an aggregator or franchise, or by working for an established company. The benefits of doing something like this include having some training and support, and also not having to outlay huge sums of money to get started. You can also learn while you work. We can introduce you to aggregators and groups to get you started
