How to Become a Mortgage Broker in 6 Steps

Written By Alla Levin
April 05, 2021
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How to Become a Mortgage Broker in 6 Steps

The real estate industry is a lucrative and exciting field to get into. Many positions are key in the home buying process. You can become a real estate agent, probably the most known position, and who deals with buying and selling homes. You can become a real estate investor, a person who buys and flips properties to sell. Or, you can become a mortgage broker.

A mortgage broker has a crucial role in the home buying process. They are the ones who stand in between a person buying a home and potential mortgage lenders. They deal with finding suitable interest rates, gathering necessary documents, verifying employment and income, and presenting that all to the mortgage lender. Without a mortgage broker, the home buying experience would be a lot more complicated. So, if you think you have what it takes to take on this title, here is how to become a mortgage broker in 6 steps:

Register Through the NMLS

Before you begin your journey of becoming a mortgage broker, you must register with the Nationwide Mortgage Licensing System (NMLS). To do this, you will have to complete fingerprints and present your employment history, personal history, and credit history. You will then receive a NMLS Unique Identifier to get you started.

Complete the Pre-Licensure Mortgage Broker ProgramComplete the Pre-Licensure Mortgage Broker Program

After you register through the NMLS and receive your unique identifier, you must complete the pre-licensure program first, which is required in every state. To take the program, you must have at least your high school diploma. The program is 20-hours long, consisting of 3 hours of Federal Law and Regulation, 3 hours of Ethics, 2 hours of Standards, and 12 hours of electives. You can find these classes on the NMLS website and complete them in a timeframe that works for you.

Pass the NMLS Test

After completing the mandatory pre-licensure program, you must take and pass the NMLS test, also known as the SAFE Mortgage Loan Originator Test. Prepare for the test with a NMLS pre licensing course, that includes review flashcards and practice tests. It is important to prepare thoroughly for the exam to pass your first time around. The test will consist of approximately 100 questions. It will quiz you on a variety of topics, like federal mortgage-related laws and general mortgage knowledge. You must receive at least a 75% to pass.

Register Your Mortgage Broker Business

Once you complete the above two steps, then you can register your business. You will need to create a business name, establish an employer identification number, determine your business location, and figure out a business structure. The requirements for registering your own mortgage broker business differ for every state, but these are the general guidelines.

Figure Out if Your Business Will in-Person or OnlineBusiness Will in-Person or Online

This depends on your own personal preference and what is allowed in your specific state. Some mortgage brokers prefer to have an online business to save money by having a home office. Other people prefer to have a physical business in a rented office space. What you chose will also affect your budget as a mortgage broker, so it is important to consider that before deciding on your business format.

If you’re not ready to launch your own business or prefer to work for an established mortgage broker, you can apply once you’ve received your broker license.

Acquire Your License

The first part of this step is determining your state’s requirements. Then, you must make sure you meet all those requirements, which usually includes passing the NMLS test and paying the licensing fee. You then have to secure a mortgage broker bond, which is mandatory in most states. The bond will protect your clients by certifying that you will follow your state’s regulations. After obtaining the mortgage broker bond, you can finally submit your application for your license.

With this, you will need to include your business name, location, and any of the other required details. If everything with the application goes smoothly, you will receive your mortgage broker license, which will be sent directly to you.

Now comes the fun part: starting your career as a mortgage broker! During this time, make sure you form connections with other brokers to gain more knowledge and possible clients. You will also want to continue with your training by completing in-person or online education courses about the industry. Taking these courses will improve your knowledge of the field and therefore enhance your skills. While this process may seem intimidating, it will be worth it once you land a career as a mortgage broker.

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