I know a broker who has a full time job and is doing it on the side. He runs to the toilet or goes outside whenever there is a call - which is starting to be noticed by his employer. His clients also complain they can never get a hold of him (he can't be in the toilet all day!). He probably loses a few because of this, but he is doing well considering the circumstances.
Mortgage Broking Business
- Thread starter Crido
- Start date
That was largely the premise of the now defunct "refund home loans" ..............
ta
rolf
I guess you need a job if you are giving your commissions away!
Part time is ok only if your mentor or "company" that your working under provides that support ie call diversion to other mentors or staff and back office support as required.
Most brokers would start off part time ( 3-6 month or even up to 12 month); how you start off and who and how your mentor/company operates will makes a big difference on what type of broker you will become.
Your success as a broker will come down to your own hard work, passion, your professional support/mentor/team.
Hard work = Quick turn over and reliable
Passion = Honest response, integrity and customer service
Professional support/team = Professional knowledge
^ The three key element of a good broker.
Most brokers would start off part time ( 3-6 month or even up to 12 month); how you start off and who and how your mentor/company operates will makes a big difference on what type of broker you will become.
Your success as a broker will come down to your own hard work, passion, your professional support/mentor/team.
Hard work = Quick turn over and reliable
Passion = Honest response, integrity and customer service
Professional support/team = Professional knowledge
^ The three key element of a good broker.
Thanks for the replies guys. Some solid advice. I understand the ideal situation is jumping in full time but surely for 6 months I'll be able to make things work with 3-4 solid days every 8, plus the odd phone call outside of these days given the right back office etc.
What is the general consensus on how long it takes to make approx $50,000/year or a basic full time wage? I understand this varies but what have you noticed as norm the last couple of years?
What is the general consensus on how long it takes to make approx $50,000/year or a basic full time wage? I understand this varies but what have you noticed as norm the last couple of years?
I'd say most people in my area will be in the $300,000 regions and then factoring in I'll be losing a cut to the broker and aggregator aim for maybe writing 1 loan a week?
Is that something quite achievable in the first six months?
Is that something quite achievable in the first six months?
Wow, that's a bit concerning.
How do you make a good living then? Mainly through trail commissions? Writing only large loans?
Only the good ones do
I understand not everyone makes great money. Given the figures in this thread however, it would appear it would be difficult to even make an average full time income.
Most brokers don't make a good living. I have other qualifications and businesses, but these don't take time out from the loans - I go every loan I get.
It will be very hard for you to find leads. And then harder to convert these and keep them.
It gets easier over time. Most brokers only write about $500k a month, if that. Just don't over estimate earning potential. This is why most brokers end up working PAYG with a group like a volume builder or a real estate agency.
Be excellent at what you do - you need to have technical skills (knowing policy, loan structure, etc), be personable, efficient and motivated.
Provide a great service and the word will spread.
Surround yourself with good business mentors who give you a kick up the a** when you start to get too comfortable.
Cheers
Jamie
Many brokers start by working part time and they transition over to full time as they get busier. 1 loan a week isn't a full time job, 1 loan a day is very busy.
Here's the harsh reality of starting a mortgage broking business...
If you want to replace an income of $50k, you probably need to generate at least $80k per year to cover business costs (and this would be running with minimal overheads).
Then consider that you loose about 20% of your income to an aggregation, so $80k becomes more like $100k.
Now we put this in terms of commissions. In the first year many lenders don't pay trail commissions, so we can simply ignore this and rely sole on upfront commission which is about 0.6% of the loan amount in most cases.
$100k / 0.6% = $16.67M
To replace a $50k income in the first year or two, you need to write about $1.4M per month. Average loan size is about $300k - $400k. Hence you need to write about 1 loan per week to replace a $50k income.
For an experienced broker with good networks in place this is fairly easy. For a new broker still finding their way, it can be harder than it sounds.
But wait, there's more
...
It takes about 3-4 months to get paid! You usually get paid about 6 weeks after the actual settlement. Since most settlements are about 45 or 60 days, it can be a long time between doing the work and collecting the money.
I've been there myself and I've mentored a number of brokers through their first few years. There are a few who manage to earn a good income in the first 12 months, but they're extremely rare. A few will break even.
About 80% of brokers fail and leave the industry within the first 2 years. I've heard that up to 80% of the remaining brokers quit in years 2-4. I've seen this across large groups and small individual businesses.
There's a lot of different factors which can contribute to becoming a successful and profitable broker. I'd say the one key thing common amongst all successful brokers is the right people helping behind the scenes and the simple will power not to give up.
Here's the harsh reality of starting a mortgage broking business...
If you want to replace an income of $50k, you probably need to generate at least $80k per year to cover business costs (and this would be running with minimal overheads).
Then consider that you loose about 20% of your income to an aggregation, so $80k becomes more like $100k.
Now we put this in terms of commissions. In the first year many lenders don't pay trail commissions, so we can simply ignore this and rely sole on upfront commission which is about 0.6% of the loan amount in most cases.
$100k / 0.6% = $16.67M
To replace a $50k income in the first year or two, you need to write about $1.4M per month. Average loan size is about $300k - $400k. Hence you need to write about 1 loan per week to replace a $50k income.
For an experienced broker with good networks in place this is fairly easy. For a new broker still finding their way, it can be harder than it sounds.
But wait, there's more
...It takes about 3-4 months to get paid! You usually get paid about 6 weeks after the actual settlement. Since most settlements are about 45 or 60 days, it can be a long time between doing the work and collecting the money.
I've been there myself and I've mentored a number of brokers through their first few years. There are a few who manage to earn a good income in the first 12 months, but they're extremely rare. A few will break even.
About 80% of brokers fail and leave the industry within the first 2 years. I've heard that up to 80% of the remaining brokers quit in years 2-4. I've seen this across large groups and small individual businesses.
There's a lot of different factors which can contribute to becoming a successful and profitable broker. I'd say the one key thing common amongst all successful brokers is the right people helping behind the scenes and the simple will power not to give up.
Long term it is, but for the new broker it's quite common, especially if you bundle in licensing costs.
Thanks for giving some hope pt bear!
The role is working under a very successful broker at loan market inside a ray white office so I'm hoping there will be a decent number of leads generated through that alone.
The role is working under a very successful broker at loan market inside a ray white office so I'm hoping there will be a decent number of leads generated through that alone.
