Requirements to Become a Commercial Mortgage Broker
A commercial mortgage broker serves as a go-between for borrowers and lenders in commercial real estate transactions. Requirements to become a mortgage broker vary based on state. Once a commercial mortgage broker obtains a license, he will need to cultivate his skills and build relationships in order to be successful.
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Education
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A commercial mortgage broker does not need a college degree, but it is a plus if he obtains one. Degrees in finance or accounting are the most useful. He can also enhance his knowledge by taking courses in real estate. There are many available classes both online, at local colleges or through financial institutions. There is also a wealth of resources available both in print and on the Internet. The more knowledge a prospective broker has going in, the easier it will be to get licensed.
Licensing
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A commercial mortgage broker must be licensed in accordance with the laws of his state. The requirements and fees vary by state. For example, in New Jersey, a broker must apply for a license with the New Jersey Department of Banking and Insurance (DOBI). He must complete 20 or more hours of courses including Federal Law, Ethics, Non-Traditional Mortgage Lending and 12 hours of elective inclusive of four hours of New Jersey-specific courses. He will have to pay $1,300 for his license and must provide a $150,000 surety bond. His financial statements must indicate a net worth of at least $50,000.
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Skills
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At the most basic level, a commercial mortgage broker is a salesman. First, he has to sell the buyers on the property. Then he has to sell the buyers and the property to the lender. For a mortgage broker to be successfully, he has to have exceptional communication and interpersonal skills. He must also possess the tenacity and dedication to follow a deal through to its conclusion. A commercial real estate deal can cover many months filled with phone calls, approvals, extensions, false starts and abrupt modifications to the deal. In Minnesota, on the other hand, the applicant must pay $2,125 in the first year and $1,062 in the second year of a two-year license. He must display a net worth of $250,000 or post a $50,000 surety bond or letter of credit.
Relationships
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A commercial mortgage broker must be adept at starting and cultivating relationships. Unlike residential real estate which is often a "one-and-done" business, people who deal in commercial real estate often participate in multiple transactions over a number of years. If a person has a good experience with a broker, she is likely to use him again. If that broker has relationships with top lenders, he will be in an even better position to be successful.
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