How to Become a Loan Note Broker

Of the numerous avenues for self-employment, those that don't necessitate a huge investment are the most lucrative. One such option is a loan note brokering business, which provides an immense earning potential. A loan note broker is one who works at introducing borrowers to legitimate lenders other than banks. To become a loan broker, you may need to obtain regulatory approval to start your business. This often involves getting qualified and certified -- a process that ensures you have sufficient knowledge of the field before you launch your business.

Things You'll Need

• Computer
• Internet access
• License fee
• Fingerprint record
• Birth certificate
• Security bond amount

Instructions

1. Obtain information about licensing. Not all states require you to possess a loan-brokering license -- in many places, you can operate a loan note brokering business with a real estate broker license. Browse the Internet for the website of your state Department of Real Estate (DRE).

2. Search for information about procuring a loan broker license. If your state requires only a real estate broker license, find out the procedure involved in procuring the license. Alternatively, go to the website of the Nationwide Mortgage Licensing System & Registry (NMLS) Resource Center (see Resources) to find information specific to your state.

3. Get qualified. Talk to people in the mortgage profession. Find institutions that conduct the prescribed courses in a classroom or online. Take and complete the theoretical and practical courses of study.

4. On completion of the course of study, ask your course provider for details of the exam. Take and clear the stipulated exam.

5. Obtain the license. Procure, fill out and submit the application form along with the specified fee to NMLS for acquiring your license. Attach the prescribed additional documents to obtain your license. Include a set of your fingerprints for the mandatory criminal record check. Submit a copy of birth certificate as proof of legal presence. Inquire about and pay the amount required as security bond. Wait to receive your license.

Tips & Warnings

• Besides the real estate broker license, some states such as California allow you to conduct loan-brokering activities under a finance license or the mortgage-lending license for residences. This is subject to particular conditions, however. Find out if there are any such provisions in your state by contacting your state's Department of Corporations.

• Before commencing your business operation, educate yourself about the rules of the Department of Housing and Urban Development for arranging FHA loans.

References

• State of California Department of Real Estate: Instructions to License Applicants: How to Obtain and Maintain a California Real Estate License
• California Government Department of Real Estate: Examinees/New License Applicants
• California Government Department of Real Estate: FAQ - Mortgage Loan Brokering in California
• Wes-State Mortgage Inc: Can I Broker Loans without a Loan Broker License?
• Become a Loan Broker - Loan Broker Program
• California Real Estate School Online: California Real Estate License Requirements

Resources

• Nationwide Mortgage Licensing System & Registry Resource Center: Professional Requirements