What Does a Mortgage Broker Do? (With Skills and Salary)
Updated March 3, 2023
Mortgage brokers are an important part of finding commercial and residential real estate for purchasers. They often help their clients find the best mortgage loans for their needs. Understanding the important role this profession has can help you decide if this is the job for you and whether you need a mortgage broker for your next real estate purchase.
In this article, we answer the questions "what does a mortgage broker do," provide a comparison between a mortgage broker and a loan officer, explain the requirements to become a mortgage broker and describe how to become a mortgage broker.
What does a mortgage broker do?
Mortgage brokers act as an intermediary between a financial institution or lender and a prospective homeowner. A residential mortgage broker evaluates the buyer's financial and employment information and gathers mortgage loan options from multiple lenders. Once the buyer selects an option, the broker helps them complete the loan paperwork. A commercial real estate mortgage broker performs the same function for buyers of commercial properties.
The daily responsibilities of a mortgage broker include:
Establishing professional relationships with mortgage lenders
Gathering documents, credit history and employment verification of prospective homebuyers
Providing the borrower with lending options that best suit their financial situation
Applying for mortgage loans on behalf of the borrower
Advising clients on their options and clearly explaining the legal and repayment details of any available loan
Ensuring loans are compliant with all regulations and laws
Completing all closing paperwork with the lender, title company, insurance broker and any other relevant agency
Read more: Learn About Being a Mortgage Broker
Loan officers vs. mortgage brokers
Loan officers are similar to mortgage brokers, though the breadth of materials they work with is larger. Loan officers evaluate, recommend and approve applications for many different types of loans. They often work on behalf of lenders to ensure all applicants meet the requirements for loans and are able to pay the loan back over a period of time. In contrast, mortgage brokers typically work on behalf of mortgage loan recipients, ensuring they get the best loans for their current financial standing.
These two professions often interact as mortgage brokers may create applications for loans that loan officers review and approve or deny based on the requirements of their employer.
Mortgage broker requirements
Success as a mortgage broker usually requires a combination of education, licensure and specialized job skills. Below are the primary requirements for becoming a mortgage broker:
At a minimum, mortgage brokers need a high school diploma or a GED to find employment in many organizations. Earning an associate or bachelor's degree in business administration, finance or accounting can expand their job opportunities and possibly increase their earning potential. To maintain an active broker's license, which is a requirement to practice in the U.S., brokers complete continuing education courses to remain current with industry trends and regulations. The number of professional development hours a broker needs to complete depends on the state that issues the license.
Prospective mortgage brokers also complete a 20-hour training course before taking the licensure exam. The course focuses on topics such as federal and state mortgage laws, broker ethics and mortgage origination. Once a mortgage broker gains employment, they typically continue to learn important skills while working at their job. Their employer teaches them about company-specific practices and provides real-world experiences for them to use throughout their careers. They also learn about specific scheduling software or computer programs the company may use.
In the U.S., the 2008 Secure and Fair Enforcement for Mortgage Licensing Act (SAFE) requires all mortgage brokers to earn licensure by passing both the national and state versions of the SAFE Mortgage Loan Originator Test. The National Mortgage Licensure System (NMLS) administers the test and keeps a record of all current licenses. Mortgage brokers renew their licenses annually to remain compliant with all regulations.
Mortgage brokers spend a lot of their time establishing and maintaining relationships with lenders and borrowers. They also help people navigate the complicated legal and financial terminology in mortgage documents. For those reasons, it's important to possess some of the following skills and qualities, including:
To generate business and develop good relationships with borrowers and financial institutions, it's vital to have excellent customer service skills. These include being a good listener, responding quickly to phone calls and emails and being able to explain the fine points and details of the application process and closing documents. Brokers employ customer service skills with borrowers to make them feel more comfortable during each step of the process.
Mortgage brokers often gather information and statistics related to several different lending options and help the borrower make the best decision. They need excellent critical-thinking skills to carefully review each document and all criteria and choose the most viable option for their clients. They may also help their clients determine and find important documents and respond to changing scenarios quickly, which involves critical thinking quickly to ensure all processes occur.
The mortgage process requires requesting employment verifications, pay stubs, credit histories and many other personal details. Being able to communicate those requests and explain the industry and regulatory phrases to borrowers is important for a broker. As they work with a variety of financial employees in the industry, brokers need good communication skills to correspond with all parties.
The primary role of a broker is to create a lender-borrower relationship that may last for many years. Brokers act as a liaison between the two parties, and the ability to ensure they agree to common terms employs the use of good negotiation skills. These skills are also important for finding commonalities between the two groups, especially so each one feels content with their decisions to lend and borrow money respectively.
Mortgage broker work environment
Mortgage brokers work in a fast-paced environment where communication is constant. Some brokers work in an office space with fellow brokers, assistants and other mortgage employees, while others work by themselves in a remote location. Each broker may have a unique working environment, but here are some conditions they usually share:
Meeting with clients in an office space
Communicating with lenders via phone or email
Generating new leads by networking with real estate agents, lenders, prospective home buyers and insurance brokers
Organizing multiple mortgages and clients at once, with heavy reliance on computers and telephones to communicate
Answering questions clearly and following up during the various phases of document requirements
Reviewing details of legal documents to be able to convey their meaning clearly Repeating similar tasks
Working occasional irregular hours, such as nights and weekends, to meet the needs of borrowers
Salaries for mortgage brokers vary based on their experience, location and brokerage size. Some brokers earn a commission in addition to their salary. According to Indeed Salaries, the national average salary for mortgage brokers in the U.S. is $101,721 per year.
For the most up-to-date salary information from Indeed, click on the link(s) provided.
How to become a mortgage broker
You can follow these basic steps to become a mortgage broker:
1. Complete your education
The minimum educational requirement to become a mortgage broker is a high school diploma or its equivalent. Some companies prefer a candidate with an associate or bachelor's degree in business administration, accounting or finance. You can choose to earn a college degree to gain more knowledge of financial and analytical topics. It can be helpful to review local mortgage broker job descriptions to determine the best educational path.
2. Obtain a broker's license
Find an accredited institution that provides the 20-hour course required to prepare you for the licensing exam. Visit the NMLS website to find a course that satisfies the requirement in your area. The NMLS exam consists of 125 questions and lasts about four hours. You take the exam at an approved testing center.
3. Meet continuing education requirements
Throughout your career, you often have requirements to take continuing education classes as recommended by the NMLS to keep your license current. When you renew your license annually, you submit proof of your continuing education. This ensures you continue to learn and master the skills you need for success as a mortgage broker.
4. Find employment as a mortgage broker
Some mortgage brokers work with established companies that assist in building client relationships quickly. Other brokers work independently or on a contract basis. If you want to work with other brokers in an office setting that offers administrative support, search for jobs in brokerage firms. You can also search for contract positions to gain traction in the field and eventually become a self-employed broker.
5. Gain experience
There are many opportunities for advancement as a broker as you gain experience. Consider finding a mentor that can help you create a defined career path as a broker and make professional industry connections. You can also develop different skills as a mortgage broker depending on the goals and mission of the firm you choose. For example, you may learn more about residential mortgages if you work with a residential firm or more about commercial real estate mortgages if you work with a commercial firm.
Read more: How To Become a Mortgage Broker: 7 Steps
Mortgage broker job description example
Below is an example of a mortgage broker job description:We are seeking a vibrant, motivated, organized and experienced mortgage broker to join our brokerage firm. The ideal candidate has a high school diploma, maintains a current license and demonstrates proficiency in all aspects of mortgage origination and closing. They also have at least three years of experience in the field and show good sales and networking techniques.Primary responsibilities include:
Acting as the intermediary between potential lenders and borrowers
Analyzing and comparing multiple loans for recommendation to the client
Collecting and assembling required verifications to prepare for
Ensuring strict compliance with all state and federal
Acting as the primary contact for borrower's questions and
Submitting relevant documents on time
If you're interested in a role in real estate, consider one of the following careers related to a mortgage broker:
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