Getting started?

[walds11]

I currently work in retail platform sales for a large bank in PA. I open bank accounts, CDs, IRAs, limited investments, lending: HELOCs, HELs and some first lien position lending and Small Business. I refer mortgages to the Mortgage Rep. I make a decent base salary plus monthly commissions. Working in a retail branch is nice because client come to you, but there is lot of servicing beyond managing my current clients and pipeline. And tons of micro-management!!! I am getting tired of working for the man.

I am thinking about becoming a mortgage broker. I know a few one man mortgage brokers and they make a decent living. One works from home and the other has an office with fairly cheap rent. They do refer some HELOC and HEL business to me. Just recently I referred a mortgage broker a deal that I or my Mortgage Rep could not do. When the deal closed, he gave me a little "kick-back." I was thinking, wow, what if I could do this myself. 2-3 deals a month and I would easily gross $150,000. That's about what this one guy's production has been lately. Obviously it is not as easy as it sounds.

Start up and monthly expenses seem to be pretty low for a Mortgage Broker. What does it take to start up and maintain ($, licensing, etc)? I have the background and knowledge about lending, so that is a good start. I have a lot of contacts in the financial services/banking industry, so that could be a good start for referral sources.

What is this thing I hear about paying a company per file to do a mortgage? Maybe you are not a full fledged broker when you do this?

Next summer/fall 2008 would be an ideal time for me to start up a business (or quit my job)because my son starts kindergarten and our childcare expenses will be pretty much nill. My wife is a teacher, so we get benefits through her.

Thanks!!!

[Erik]

Being the broker is different than being a loan officer, but often loan officers can be referred to as brokers if they work for a broker. I'm sure that is clear as mud and you probably already knew it all but I figured it couldn't hurt to start by making things more foggy. Or something.

Anyway, if you don't have experience originating loans I would recommend you start as an LO working for a nice commission split for a reputable broker in your area. Learn the ropes. Gain experience. Worry about opening your own shop after you can produce what you need to to pay the bills.

The other thing you asking about - the fee per file thing - is called a net branch (or at least that's what I think you're talking about). Most net branch companies won't let you set up a branch as a newbie loan officer but not a bad way to go after you get some experience under your belt.

If you make the jump to straight commission soon and do well for a year as an LO then maybe you'll feel it's wise to open your own shop or net branch next summer. That's the approach I'd take if I were you.

[walds11]

Thanks Erik. Like you said, I really need to learn how to originate loans and take then from application to funding before I quit my job. Maybe starting out as a Mortgage Rep for my current company is a good start. They have full commission positions and also base plus commission poisitions depending on what "channel" you work for. The Net Branch things looks like a good way to start out too.

Originally Posted by Erik

Being the broker is different than being a loan officer, but often loan officers can be referred to as brokers if they work for a broker. I'm sure that is clear as mud and you probably already knew it all but I figured it couldn't hurt to start by making things more foggy. Or something.

Anyway, if you don't have experience originating loans I would recommend you start as an LO working for a nice commission split for a reputable broker in your area. Learn the ropes. Gain experience. Worry about opening your own shop after you can produce what you need to to pay the bills.

The other thing you asking about - the fee per file thing - is called a net branch (or at least that's what I think you're talking about). Most net branch companies won't let you set up a branch as a newbie loan officer but not a bad way to go after you get some experience under your belt.

If you make the jump to straight commission soon and do well for a year as an LO then maybe you'll feel it's wise to open your own shop or net branch next summer. That's the approach I'd take if I were you.