Guide for Loan Officers Looking to Transition to the Broker World | The Mortgage Processors

loan officer mortgage mortgage broker Sep 06, 2021

With the mortgage broker industry booming, loan officers are looking to transition into the broker world. If you're considering this career change, there are many things you need to know before jumping in! This blog post will go over what it means to be a mortgage broker and how they compare with your current job as a loan officer. We'll also cover what skills you should learn for success in this new role.

What is a Mortgage Broker?

A mortgage broker serves as an intermediary between borrowers and lenders; they do not make loans themselves, only offer up a collection of mortgages from different lenders to the borrower. For borrowers, the advantage of using a broker is that they can shop different banks for the lowest rates, while loan officers can deal only in the rates offered by their institution, although they may have little negotiating room. Unlike a loan officer, where you are an employee of a specific lender and limited to only the offers and funds available to that lender, as a mortgage broker, you have can a range of offers available to borrowers.

What Types of Companies do Mortgage Brokers Work With? 

There are opportunities available at both brick-and-mortar and online mortgages. They will use their networks of contacts in order to obtain the best deal possible for each client through finding the most suitable loan situation.

How Does Compensation Work for Mortgage Brokers?

Mortgage brokers work with both traditional lenders and private investors to find financing for borrowers. They are paid an origination fee by borrowers as well as investors on successful loans they bring in, instead of getting paid "on the front" or "on the back" like loan officers. This allows your income to be sourced a little differently, but ultimately, your services are similar to that of a loan officer.

Is There Any Type of License Required? 

As there is with becoming a loan officer, you must also go through the arduous process of taking classes for a test, being fingerprinted, paying fees in order to be a licensed originator. The license is state-issued and the process and requirements vary from state to state, so be sure to do research to get the license in the state that you are doing business.

Can I Work Independently?

As a mortgage broker, you can work with a mortgage brokerage firm or as an independent licensed originator. The advantage of working at a financial institution or a mortgage brokerage is that you will have a built-in list of lenders and clients available to you, but once you become established enough, you could potentially work for yourself independently. This has more risks, but also more rewards. It will take some time to build a list of lenders with whom you work, but once you've been authorized with a few, others will view you more favorably, especially if you're producing a lot of new business.

The mortgage brokerage industry has been on an upward trend in recent years with more people looking to buy homes and take advantage of low-interest rates. There is a lot of information out there about the mortgage broker industry, but many loan officers are still unsure if this career path is right for them. Hopefully, this blog post has helped you understand what becoming a mortgage broker entails and whether or not it's the right decision for your career. 

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