Read on to know more about how to become a loan broker, the qualifications and experience required, etc.
Oct 28, 2018
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Due to an increase in the people applying for loans, coordination and broking businesses have generated more career opportunities than any other business. They have certainly proven to have extraordinary earning potential. The brokers are important and responsible people who carry out loan granting duties.
A broker is a middleman who is responsible for helping and assisting prospective buyers in applying for and securing loans. His primary duty is to bridge the gap between potential borrowers and lending entities. He carries out all the formalities which include preparing the application, and handling the documentation needed for taking the process further.
Mortgage brokers comparatively earn more income than commercial ones, as the deals they make are of a high value. They make their own money by assigning a certain percentage of commission, creating a customer base and generating referral business. A commercial broker generally deals in commercial loans and recommends best financial packaged plan for clients.
Eligiblity and Experience
In some US states, there are no hard-and-fast rules, and licensing may not be needed. However, there are different regulations in different states. You need to get in touch with a local licensing authority for the purpose of determining the requirements in that particular region.
If your state requires you to obtain a license, you are required to go through proper licensing procedures and formalities. You need to pay a certain application fee, and submit the application through the National Mortgage Licensing System (NMLS) for obtaining a surety bond.
You also have to provide fingerprints, and undergo a criminal background check. There may be some additional requirements which may vary from state to state.
It is better to have an educational background in the finance field. A potential broker may choose a course in banking as well. However, this is not obligatory. Even a general knowledge of loans and mortgage operations will do. The related education plays a very important role in getting customers to trust a new broker's expertise and credibility.
You may also undergo some specialized trainings. Such training would be very useful in helping you develop the kind of knowledge and skills that are required. You may undergo such training in Brick and Mortar (B&M) schools, or take the help of some online programs.
You may even think about acquiring related certifications which would be helpful in carrying out the business smoothly. Many states offer an exam, and it's successful completion leads to the certification. You need to get at least 75% of the answers right in the exam.
After you have undergone training and received the certification, you may choose to work under the supervision of a reputed loan broker, or look for an entry-level job in mortgage company. You also have the option for starting your own business which would most importantly require capital and also an effective marketing plan.
You may promote your business by advertising in local newspapers and business directories. Get in touch with people in the related field, and create a network which will later help you get good business.
For this profession, you just need to have the required understanding of loans, finance, or banking operations. Moreover, it is also recommended to undergo the related training and receive the certification for taking your business to the top.