Becoming a Mortgage Broker?

10. You can pull all of the above of but if you don't already have the ability for people to like and trust you (aka charisma) within the first 5 minutes of meeting you then stick to what you are currently doing.

Allow 5 years to start making 200k+/year and a lot of knock downs along the way. That's assuming you have quality mentors and a driven personality combined with a passion to see others succeed. Average broker makes circa 70k FYI.

Great post, by mentours, I assume you mean an existing gun broker as your teacher or taking you under your wings,

hypothetically, if you are intelligent, qualified, starting out on your own, have great people skills, and can target a niche market of clientele (lets say from a different culture) and you get your leads quite easily,
wouldnt that be all you need (not insinuating brokerage is easy or mentours arent useful).

to me as long as you cross your ts and dot your Is, and have a certain skill set, and can get your clients through whatever means, it seems like a fairly straight fwd formulae
 
to me as long as you cross your ts and dot your Is, and have a certain skill set, and can get your clients through whatever means, it seems like a fairly straight fwd formulae

xcept that no sensible association will allow you to practice those types of random undirected acts of potential malpractice

ta

rolf
 
/scratching my head

What malpractice

That pretty much says it all. You don't know what you don't know. Even if you do get a loan approved and a happy borrower, without some guidance, would you even know where to start to ensure you're compliant with all the regulations?

Would you even know how to submit the loan for that matter? Today we spend the entire day with business coaches and customer relationship software developers working through putting better systems into our business. I know it looks like we just fill in a form or two, get some payslips and send it to the bank, but you'd be very surprised just how complicated this seaming easy task is. There is a massive amount of work that goes on behind the scenes that most people never see.

New brokers are required to have a mentor by various associations (which you are required to be a member of). Even if it wasn't required, most would still need it.
 
Well said Peter. I remember my first deal I got through. It took a tremendous effort but seemed worth it when I got my first trail circa $20/month :)
 
The first loan I wrote was for my sister in law. With my mentors guidance (Rolf Schaefer) it was a piece of cake.

The first loan I settled was for an interstate client, on a military pension earning extra money running a P0rn search engine (not kidding), wanting to purchase an investment property in a Hybrid Trust. That was a trial by fire. The trail from that deal was $6.25.
 
The first loan I settled was for an interstate client, on a military pension earning extra money running a P0rn search engine (not kidding), wanting to purchase an investment property in a Hybrid Trust. That was a trial by fire. The trail from that deal was $6.25.

Haha that's a rough start Peter.

Colin, i know a group of young and relatively successful brokers that are doing very well for themselves pretty quickly (inside 24 months). I suspect that while they'd definitely be above average, the market right now in Sydney may mean its a little easier than the days of waiting for 5+ years to do those sort of volumes. Over the course of the cycle though, if you started in 2008, then it would've been a real slog to start generating enough work to pay the bills.

@TMNT - those attributes are definitely a very good recipe for success. Although missing a quality mentor/someone with lending experience to guide you through the host of information is almost a necessity to translate those skills into a successful business. The actual loan application is only one part of the overall process: there's compliance, loan knowledge, managing relationships with lenders, pushing deals back end, seeking out what you don't know, managing systems, dealing with the 'tough' deals, etc. All of the above tends to take more time than the actual loan application itself. You need someone with a bit of experience to get you through the first set of loans.

Once you've done that, and you've built up the knowledge base, you should be right to go. I'd say you'd need pretty solid mentoring for the first year in today's broking environment to turn those attributes into a successful business.

Cheers,
Redom
 
@Redom: They would be the exception in my experience and will likely have a very switched on pro active mentor (rare to find) plus leads being spoon fed to them?

I still say to give it 5 years to start making good coin. Any sooner is a bonus or an exception.
 
"Buyer`s Choice Home Loan Advisory Service" has a part time option for persons hoping for a part time start.

Just fyi :)

very interesting thread - thanks everyone

we have been doing a bit of research on the different options to become a mortgage broker

does anyone have any unbiased feedback on the above buyers choice mentoring program?
 
very interesting thread - thanks everyone

we have been doing a bit of research on the different options to become a mortgage broker

does anyone have any unbiased feedback on the above buyers choice mentoring program?

I think it is akin to Russian roulette on whether you get the right mentor or not. Even if they are average you will still learn a lot in 2 years.

I have had 4 different mentors and the best ones I have found here on Somersoft. I have no formal agreement with any one I just read their posts and apply the knowledge.

The Irony is I had to go through the process for several years to learn what is bad, average and good advice.

Just get started would be my 2 cents and write of the first 2 years and a 100k :p
 
Dilemma

Hi guys,

As a potential future mortgage broker, I have found the posts on this site highly useful!

I have been considering becoming a mortgage broker and I thought I'd share my dilemma with you.

I have been in the investment banking / funds management industry for over 10 years and currently earning an annual salary of about $250k working for a property fund. I have a combined law degree but I have never practiced law. I'm getting quite sick of corporate life, working for somebody else and with all the internal politics. I've been wanting to start my own business, and as a keen property investor myself (4 in my portfolio), I want to do something related to property. My idea is to complete my legal certification for conveyancing (3-6 months timeframe) and at the same time attain relevant accreditation for MB. I would start a conveyancing/mortgage broking firm (one stop shop).

My issue is that based on rough calculations, I would need to be writing a loan every week (say average value $600k therefore $30m per annum) in order to make similar sort of income as I am currently, assuming that upfronts from MB would be around 0.6% (therefore around $180k pa) and I would make about $60k-$70k (let's say $1200 per purchase) from the conveyancing side. This ignores overhead costs.

This leads me to the conclusion that in order to do very well financially, you need to have built a good reputation and basically have other people working for you.

Does this sound right? Have I got the assumptions correct? Would you say that I should just stick to my current job?

Thank you for hearing me out.
 
Chozza

I am both a solicitor and an MB. You will generally need to operate through 2 separate companies and need to be careful about conflict of interest. I don't do conveyancing at all now - well maybe once or twice a year to stop forgetting the process. Conveyancing is time intensive and a high risk area - look at law cover statistics for claims made, I think conveyancing is the most risk area.

The costs of operating are very high. I spend $1000 per week on fixed costs and I don't pay rent. Mortgage broking will cost you about $2000 per month to remain registered - insurance, COSL and the main one aggregator fees. On the law side you have PI insurance, practicing certificate, CRM software etc.

So you would need to settle much more than you estimated to get the same income.
 
Hi guys,

As a potential future mortgage broker, I have found the posts on this site highly useful!

I have been considering becoming a mortgage broker and I thought I'd share my dilemma with you.

I have been in the investment banking / funds management industry for over 10 years and currently earning an annual salary of about $250k working for a property fund. I have a combined law degree but I have never practiced law. I'm getting quite sick of corporate life, working for somebody else and with all the internal politics. I've been wanting to start my own business, and as a keen property investor myself (4 in my portfolio), I want to do something related to property. My idea is to complete my legal certification for conveyancing (3-6 months timeframe) and at the same time attain relevant accreditation for MB. I would start a conveyancing/mortgage broking firm (one stop shop).

My issue is that based on rough calculations, I would need to be writing a loan every week (say average value $600k therefore $30m per annum) in order to make similar sort of income as I am currently, assuming that upfronts from MB would be around 0.6% (therefore around $180k pa) and I would make about $60k-$70k (let's say $1200 per purchase) from the conveyancing side. This ignores overhead costs.

This leads me to the conclusion that in order to do very well financially, you need to have built a good reputation and basically have other people working for you.

Does this sound right? Have I got the assumptions correct? Would you say that I should just stick to my current job?

Thank you for hearing me out.

You sound like an intelligent fellow.....with rocks in your head! :D

Honesty, you would be mad to leave a job like that on that kind of money. Knuckle down for 5-10 years and you'll be set for life. Im no mortgage broker, i deal with one regularly though, seems like a decent gig but no way would i leave a 250k job for.
 
  • Like
Reactions: S.T
Hold off on the money sde for a minute, because a decently constructed Mortgage broking boz will have some future and/or recurring income value as well, not just the week to week income that a bucket job gives. Having said that, broking has become a revolving door.

Whats more important than the money per se is, why become a broker ? if its just for the dough.............. might not work so well long term

ta
rolf
 
Terry_w/Corey: thanks for your input. It would seem like MB is a tough business! It beats me how people could be writing that much loan to make a decent living.

Rolf: is it possible that once you build a large base (around $200m) you could potentially securitise the loan book and share the upside with the borrower?
 
I think being a mortgage broker would be such a great job. Constantly being hit with new challenges, having to think strategically but also tactically in the short term. But it's not something I could do, I don't pay enough attention to the minuscule details when filling out applications etc, which is what would land brokers in hot water. But I have lots of respect for great brokers.
 
Rolf: is it possible that once you build a large base (around $200m) you could potentially securitise the loan book and share the upside with the borrower?

Nah

You don't have ownership of the loans.

You have ownership of a small portion of the loan income known as your trail

Ta
Rolf
 
Back
Top