Mortgage Broker Licensing and Education

A mortgage broker, unlike a mortgage loan officer, works for independent brokerage firms and not at a lending firm.

As a mortgage broker, you’ll act as a mediator between your clients who are looking to borrow and the firm they want to borrow from. The brokers connect prospective borrowers with different lending companies. The job may sound straightforward enough, but in actuality it’s tricky because brokers have to match the needs of both the borrower and the lender, something that requires good communication and negotiating skills.

To do this, mortgage brokers play a similar role as mortgage loan officers. They start by analyzing a prospective borrower’s financial information and credit history. Based on their client’s creditworthiness, the broker will then search around for lending companies who offer loans that the borrower would likely qualify for.

The process of finding a company can take longer than if a borrower went with a mortgage loan officer, but that’s only because brokers are searching through several companies — not just the lending firm that they work for, as loan officers do. Because they’re exposed to more lending options, it’s often easier for a client to get a loan if they work with a broker, especially if they have bad credit.

Once a mortgage broker has found a lending company that will offer a loan to a borrower, the broker then negotiates payments between the two and explains the requirements of the loan to clients.

Things to know about Mortgage Broker Licensing Jobs

  1. The work environment for mortgage brokers is very competitive.
  2. Pay is often based on commission and brokers get paid when a loan is closed. This has opened the door for predatory lending, so it’s important to research each company before selecting one. Unfortunately, federal law does not assign fiduciary duty, or a relationship of legal trust, asking that mortgage brokers act in the best interest of their clients.
  3. There are 53,000 mortgage brokerage companies that employ an estimated 418,700 employees in the U.S., according to Wholesale Access Mortgage Research and Consulting, Inc.
  4. The pay for mortgage brokers varies widely. Brokers working for bigger institutions, such as banks, may make $30,000 a year while at small companies that may make up to $100,000. Since pay is based on your commission, your paycheck will be determined by your success in attracting clients and closing deals.

Training and Education

As with a mortgage loan officer, the requirements to be a mortgage broker vary from each state. Most every broker needs to have a bachelor’s degree in business, finance or economics. Some also ask that you have a Mortgage Broker certification. This certification is not required everywhere, however, so check with your state to see what their requirements are. The National Association of Mortgage Brokers offers three different certifications, which range based on your level of expertise on the industry. If you’re interested in getting your certification, click here to see which certification you qualify for.

The association also provides courses that will prepare you for the certification exams. The cost of the exam ranges from $150 to $400, depending on whether you’re a member of the association or not. Even if a Mortgage Broker Certification is not required in your state, it can help increase your yearly earnings and make you more knowledgeable on the industry so that you better serve clients.

Aside from certifications and degrees, a mortgage broker has to be persistent in their work and have exceptional people skills. After all, unlike a mortgage loan officer, a broker is working to please two different groups — the borrower and lender — who often want different things.

Job Outlook

The employment outlook for mortgage brokers is good. For both mortgage loan officer and brokers, the federal government anticipates that the number of jobs in these fields will increase by 11 percent by 2016.

As credit has suffered in the past two years and homeowners have had a harder time getting a loan, they’re now looking more and more toward mortgage brokers for help.