Mortgage Broker License For Commercial and Residential Loans

So you’re thinking about becoming a mortgage broker. Should you get a mortgage broker license? Most states require a license for all mortgage brokers. But you will also benefit from a broker license in your career. Read on to learn how you can get a broker’s license, and what the certification entails.

Depending on what state you live in, you will have different requirements for getting your mortgage broker license. Although not all states subject brokers to licensing and regulation, most do. Further, clients often feel more comfortable knowing you have a license and a disclosed history with the state government. The states that require broker licenses do so because licenses protect the consumers. Many clients will research their broker before signing a deal with the broker, and the Internet provides a large supply of information on brokers. On the Internet, you can find lists of brokers who have new licenses, inactivated licenses, and suspended licenses. In order to have your name on the good list, you need to have a state license.

Maybe you already work as a loan officer or as a property agent and even have a real estate license. That means you have great experience; however, you still need to get a broker license if you want to perform the duties of a mortgage broker. These duties include serving as an agent for other people who want to either get or lend a loan. All loans serviced by a broker have to be secured by a lien on real property; in other words, you can’t market unsecured loans. But if you are already HUD-approved, you don’t need to get a broker license because that covers it.

Having a mortgage broker license will tell your clients that you follow high ethical standards set forth by the state. Some common rules for brokers with a license include how to advertise honestly. Advertising requirements include that the ad must show the broker has run the ad – an easy way to do this is by putting your license number in the ad. Broker license requirements prohibit false, misleading, or deceptive ads, so you also have to specify the conditions and requirements on the advertised loans and products. Other common rules involve the fees you charge clients. You have to indicate all the fees in the agreement, and the total should not exceed 10 percent of the cost of the loan. These rules follow the provisions of law dealing with conscience and ethics, and they try to guide you as a broker, as well as ensure your clients of your legitimacy.

All states have different specific requirements for getting a mortgage broker license. Most states require a minimum amount of experience and education, such as either a B.S. in finance or a related field, plus 18 months work experience; or three years experiences in the mortgage lending field as a full-time loan officer with a mortgage broker. Some states require an examination, as well.

As a broker, you have to have a physical office in the state, with the address of the office on your license certificate. This physical office requirement allows people to take part in something called netbranching. In netbranching, if you don’t meet the minimum experience requirements, you can serve as an in-state office for an out-of-state broker who needs to meet the physical office requirement.

Other requirements might include having a surety bond of, for example, $50,000, which you can get for around $300. Most states require you to renew your broker license every two years, and sometimes you have to take a few hours of continuing professional education to renew your license, as well.

When you apply for a mortgage broker license, it usually takes about two to four weeks to get your license. A mortgage broker license will help your customers feel secure about getting a loan through you, and will therefore help your business. Especially when interest rates change rapidly, brokers can get a lot of business.

Ten Questions to Establish a Mortgage Loan Broker Has the Refinance Mortgage Broker Service for You

1. What array of lenders do you as a Mortgage Loan Broker have on your lending panel?

Make sure that the broker you are dealing with is a Mortgage Loan Broker or Mortgage Planner who has access to a variety of lending institutions as opposed to a Mortgage Representative who only represents one lender and that lender’s range of products.

2. What is the best type of Home Loan that would suit my cashflow cycle and finance structure?

Make sure that the Refinance Mortgage Broker or Mortgage Planner demonstrates how the specific type of home loan will sustain your finance structure and maximise the use of your cashflow. It is vital that the method in which the loan payments are required to be made doesn’t limit the effective usage of your cashflow in minimising the amount of home loan interest payable.

3. Is it best to concentrate on the mortgage products with the cheapest mortgage interest charge?

If the response is an explicit yes, inquire as to why and move forward with caution! There is nothing wrong with cheap home loan interest rates provided the lending institution displays a track record of cheap interest rates and established funding! Mortgage products that appear to give a great deal may include high penalties, charges and costs, or may not offer the versatility of usage that you call for in the future. To prevent selecting a loan you could later regret, treat with caution a recommendation centred mainly on cheap interest charges.

4. What are the best home loan products to suit my direct circumstances and objectives, and how will they support any future plans I may have?

Make sure the Mortgage Loan Brokers proposal consists of no less than 3 home loan products that display fair comparisons among the products. Beware of a comparison that includes 1 product that seems to be far better than the other 2! Look for product features and product versatility that will permit you to amend the home loan product to meet your future ambitions and plans.

5. Aside from the fees and charges associated with the new home loan, what further fees and charges am I likely to incur?

Finance Institutions, Service Providers and Government Departments often charge costs connected with the financing procedure and often they may be a pricey surprise for the unwary. A valuable Mortgage Loan Broker or Mortgage Planner will provide you with a Loan Costing Sheet itemising all costs, charges & fees associated with the anticipated home loan procedure.

6. How do you get remunerated and what is your commission arrangement?

Asking for an explanation in writing of how your service provider gets paid for their act will assist recognize and reduce conflicts of interest. If the suggested Lender’s commission is by far the uppermost remuneration of all credit providers on the broker’s lender panel, proceed with caution as this may stand for a conflict of interest.

7. Do you provide your potential customers with a Mortgage Broking Agreement?

Not every Refinance Mortgage Brokers service is precise in what it will deliver as opposed to what it is that you want as a final product. Hence it is highly recommended that a Mortgage Broking Agreement be drawn up among the parties outlining the scope of services/products to be offered and payments associated with the work.

8. Do you perform FREE Yearly Reviews and what extra services do you give?

Discover how eager the broker is to remain in contact with you and confirm that your loan is satisfactorily ongoing meeting with your goals. What extra services does he or she give either directly or via referral that might possibly be of benefit to you and are there savings on hand if you bundle these services with that of the mortgage?

9. Where may I turn if we have a disagreement that cannot be sorted out?

Do you offer an External Dispute Resolution Service (EDRS)? Request the service provider to clarify the complaints process offered by their business, outlining who you might complain to and which EDRS they are a member of? A worthwhile Refinance Mortgage Broker will provide you with a personalised Financial Services Guide at initial meeting that will outline all the particulars of their complaints process as will their Mortgage Broking Contract.

10. Are you an MFAA certified Mortgage Loan Broker?

By dealing with a broker who is a certified MFAA member, you are doing business with a person that has fulfilled minimum standards of education, experience and ethics to sustain their membership status.