Career Questions: Mortgage Broker Training And Education Requirements

Mortgage brokers are in high demand, here are the basic requirements to becoming a mortgage broker.

Mortgage brokers are in higher demand than ever. The country now has the highest number of homeowners in history while real estate investing has become a career for thousands. The result is a steady customer base in need of mortgage broker services for the purchase of real estate, second mortgages, equity loans and much more.

Currently, there are an estimated 40,000 mortgage brokers in the United States. In 1987, only around 20 percent of loans were originated with a brokerage, in 2002 that number jumped to approximately 60 percent of all loans.

As the middleman between borrowers and lenders, mortgage brokers are independent contractors who research available loans from a variety of lenders - as many as 40 wholesale lenders at a time -- seeking out a mortgage that best suits the needs of a particular client. By locating the best available mortgage that meets the needs and circumstances of a borrower, a mortgage broker is paid a fee (typically based on commission on the amount borrowed).



The requirements and training needed to become a mortgage broker varies from state to state. It's best to check with the government agency in your state responsible for licensing mortgage brokers to ensure that you fully understand the specific requirements in your area. While one state may ask nothing more than a fee to obtain a license, in another state, a person may need extensive classroom education, particular education experience and even a minimum net worth. A few states also require background checks to ensure a potential mortgage broker has not been charged with crimes including fraud.

Most commonly, a person will be required to fill out an application, pay an application fee, meet minimum financial requirements and post a surety bond. A surety bond, which may also be known more specifically as a mortgage broker bond, covers clients - not the broker""in the event of a claim. Bonds are available for a number of major insurance companies and can be issued in a wide variety of dollar amounts, typically from $5,000 to more than $50,000, depending on the state the broker is doing business in.

In states that require specific professional backgrounds, contact the licensing entity in your state for detailed information. The most common professional experiences accepted for mortgage brokers may include work in the money lending industry such as a loan officer, mortgage banker or lender bank manager. Other acceptable backgrounds may include a mortgage broker in another state or an attorney certified by any state as a real estate specialist.

Education requirements, again varying by state, can include classroom instruction or practical hands-on experience as well as a passing grade on a school or state exam. For states that require classroom instruction, this requirement may often be met by attending classes at a local college or university, business or real estate school.

When hiring mortgage brokers, mortgage brokerage firms and mortgage lenders typically look for individuals with previous sales experience, a college degree or equivalent, computer and typing skills and the ability to work flexible hours, including some nights and weekends.

A number of mortgage brokers are also licensed as real estate brokers, offering mortgage services as supplements to realty services. However, some states prohibit the addition of mortgage broker services to a real estate practice; so always verify restrictions with your state's licensing agency.

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