How to Open a Mortgage Company
Independent mortgage companies represent a variety of home financing lenders and can help consumers find the best plan to fit their needs. A mortgage company grows by referrals, repeat business and targeted marketing efforts. Master the basics to become successful as you learn how to open a mortgage company.
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Things You'll Need
- Mortgage broker license Incorporation papers Bond Lenders Office space Furniture and equipment Computers Mortgage processing software
Instructions
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Learn the ropes of the mortgage lending industry by spending time working for another broker as a loan officer. Train on the job while earning commissions so that you can get into your business with a clear understanding of the work. Take a mandatory 60-hour training course, such as the online training offered by Abacus, and apply for a license through a state PSI examination center.
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Incorporate your business as a limited liability corporation to protect yourself, to build credibility and to meet the terms of many state requirements for licensing. Get a broker license. Check with your Secretary of State office to find out what fees and licenses are required as each state has different rules.
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Find out from the Secretary of State how high of a bond is required by your state and purchase the necessary insurance policy. Many states require mortgage companies to post at least a $10,000 surety bond to operate in the state.
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Lease office space in order to bring in loan officers so that you can make money off their work as well. Furnish the office with desks, chairs and filing cabinets. Most loan officers have their own laptops but you may have to provide a few desktop computers as well.
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Gather financing arrangements with lenders. The more relationships that you have, the more options you'll have to offer clients. Satisfied customers can be the main source of new business through referrals.
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Purchase mortgage processing software that can help you track leads as well as process loans and communicate with lenders. Look at web-based applications that can be accessed in real time from anywhere such as the programs offered by Captaloans.
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Tips & Warnings
Apply for a branch license for your business so that you can sell mortgage products anywhere in the country. A low fee of about $200 can get you into the national scene by allowing you to ride on the backs of major mortgage lenders and use their local permits. Access branch licenses through groups such as Mortgage Broker Land.
Many states have personal wealth requirements for principals and owners of mortgage companies. Find out all the requirements to make sure you qualify before investing any time or money in the company.
