How to Become a Private Mortgage Broker

Many mortgage brokers can earn a substantial income for their work. Mortgage brokers represent several mortgage lenders at one time. When a mortgage broker works with an applicant, he typically has access to several more loan programs and loan companies than a mortgage banker does. Because of the variety of products, homeowners often use mortgage brokers for their lending needs. Becoming a mortgage broker requires knowing the federal laws and the state laws for states you wish to work in.

Instructions

1. Study the laws for the states you wish to do business in. Each state regulates mortgage brokers differently than others. The common theme in each state is mandatory class work and mandatory testing. Additionally, other laws may apply, such as background checks, bonding and continuing education. It is important to know what is required before you apply for your mortgage broker's license.

2. Register with the Nationwide Mortgage Licensing System (NMLS) if required by the state you wish to do business in. The NMLS is used by all 50 states to approve courses and administer the testing required for the mortgage broker license. The NMLS directs you to a license testing center in your area. Licensing testing centers must be approved to administer the test.

3. Complete all of the courses required for the state you wish to do business. Many states require a specific number of hours of study, which may include courses specifically in that state's laws. If you wish to be licensed in more than one state, you will be required to pass each state's individual licensing requirements. Once all of the coursework is completed your eligible to take your license test.

4. Obtain your fingerprints, which are to complete a background check as required by each state. The NMLS and the FBI will complete the background check. The background check reviews your criminal history to ensure you are eligible to receive a mortgage broker license. Some states require a credit report in addition to a background check. If you have negative items on your credit report, a written explanation should accompany your credit report.

5. Pass the test required by the state and federal government to obtain a mortgage broker license. When you arrive for the test, you required to pay the fee in full. As of 2011, the federal test administration fee is $92 and the state test administration fee is $69. You will know if you passed or failed the test before you leave the testing center. A score of 70 percent is required to pass the tests.

6. Complete the mortgage broker application. Include with the application your test results, your background check results and all other items required by the state for the license. Check each state's license requirements carefully as they will vary from state to state.

References

• NMLS: State Licensing Requirements
• NMLS: Testing