In This Chapter

A career as a mortgage broker offers financial, personal, and professional satisfaction. The earnings potential is virtually unlimited, based at least in part on your own efforts. But the personal and professional rewards are equally important if you choose this career path. In many ways, you’re a small business owner, determining your own fate.

In this chapter, you will discover the financial and personal rewards of this career.

Most mortgage brokers work on commission. Your earnings are based on how many loans you close. You earn a broker’s fee for bringing the loan to the lender, you earn fees based on a percentage of the loan, for any “points” that the client pays in order to secure a lower rate, and, if applicable, a yield spread premium (a fee paid to the mortgage broker for the deliver of a loan that carries a higher interest rate). The details of each of these components is discussed in Chapter 17. But the largest chunk of the fee is based on the loan amount and the greater the loan amount, the better. An experienced broker will, on average, close at least 15 to 20 deals per month.

Many companies permit you to draw against your commission, that is, to take a base line of money weekly or monthly. This is not a salary. It’s simply a way to level out your cash flow. As might be expected, some months you’ll close a larger loan volume than others. The last few weeks in August are usually lighter. That’s because it’s vacation time for many people and those buyers who want to be settled in their new house before school begins closed on their homes earlier.

The term splits refers to how the mortgage broker company divides the fees paid by the lender. As an entry-level mortgage broker, for example, you might split the fees with your company ⅓ to ⅔. Your company likely will take the larger share for in-house-generated business, and you will likely get paid more for personal leads. Sometimes the splits are referred to in basis points, which are one hundredth of a percent. So your BPs (pronounced “beeps”) would be 33 for in-house-generated business, and you’d get more BPs for leads you generated.

As an experienced broker, you might start at a 50 percent split for in-house-generated business, and up to a 70 percent split for personal leads. Bringing in clients should always generate a higher commission. Many mortgage broker companies also pay bonuses at the end of the year, so you share in the corporate profitability.

If you own the mortgage broker company, then you will share in the fees paid for each loan, whether you close it or one of your brokers handles the deal.

According to the Department of Labor, the average mortgage broker earns between $36,000 and $45,750. The lowest 10 percent earned less than $24,200, while the top 10 percent earned more than $82,640.

Commercial mortgage brokers with 1 to 3 years of experience earn between $48,000 and $64,750. With over 3 years of experience, the earnings outlook is significantly higher—between $66,000 and $95,250.

A career as a mortgage broker is interesting and creative, and it’s hard to put a dollar figure on this perk. The earnings potential of a job is just part of the equation when considering a career. The type of work you do, whether you enjoy showing up each day at the office because you find the work interesting and challenging, is equally important. It’s hard to be a success if you’re bored or frustrated. That’s especially true in this field because your earnings are directly based on your efforts—and to succeed as a mortgage broker you’ve got to commit to working hard.

But one of the benefits of this job is that it encourages creative thinking. You might not think that because it seems so numbers driven. But if you’re an independent self-starter who enjoys looking outside the box for answers, then a career as a mortgage broker might be the ticket.

This isn’t a cookie-cutter job. Each client has his or her own unique financial and personal needs. Your job is to find a loan that will work for them. It’s more than just punching in a series of numbers and waiting for a printout. For example:

You get to think creatively within a structured environment. That can be a very rewarding work situation.

Maybe down the road you hope to own your own business—and in Part 6 of this book, we’ll tell you how to do that. But if you want a taste of that entrepreneurial spirit before you hang out your own shingle, then a career as a mortgage broker, working for an established company, is a good compromise. While you will benefit from the marketing and reputation of your parent company, the bottom line is this … to reach your earnings potential, you’ll have to market yourself and establish your own network of contacts.

Since your earnings are based primarily on your own efforts, you have the satisfaction of knowing that you grew your business based on your hard work.

And if you have more than a touch of the competitive spirit in you, then this job feeds that passion. Like Donald Trump, if you get a buzz when you snag the client and close a good deal, then you’ll enjoy the challenges and triumphs of being a mortgage broker.

At the end of most days as a mortgage broker, you’ll feel like you earned a good living and you helped someone else. That’s a powerful combination and an important part of whatever career you choose. There is something very satisfying about helping someone achieve his dream—and buying a home is certainly that.

There are some buyers who will need you to find a loan program that will accept them because at first glance, they don’t qualify. Then they’ll need you to walk them step-by-step through the mortgage process. For other buyers, qualifying for a mortgage won’t be a problem, but finding the lender who will offer the best terms will mean sorting through dozens of deals and then carefully presenting the range of options to your client so he can make an informed decision.

Whether it’s the first-time buyer or the client who’s owned a half dozen homes, there is a thrill in finding a good deal and then locking it in. The satisfaction of knowing that you are part of the team that connected a buyer to the home of his dreams should certainly be considered a perk of the job.

You have to like working with people to be a successful mortgage broker. It’s not a job that allows you to hide in an office and crunch numbers by yourself. You don’t have to be the life of the party, but you have to enjoy meeting new people. You’ve got to make a connection so that you can sell your product—which is primarily you! The competition is tough and most brokers are using the same group of lenders. What else do you bring to the table?

Your ability to connect with clients, sift through the options, effectively communicate the choices, pay attention to details, and yes, remain patient and good-humored through the process is the critical difference. If you don’t like working one-on-one with strangers, then this may not be the best job choice for you. But if you see each new person as a potential client—and friend—then this career offers a lot of personal satisfaction.

Mortgage brokerage is a service industry. Your livelihood is dependent on satisfying your clients. Otherwise they’ll move on to your competition. So if you’re looking for a job that’s strictly 9 to 5, Monday through Friday, this may not be the profession for you. At the very least, you will probably have to resign yourself to lower earnings.

On the other hand, not everyone is looking to work a traditional workweek. Depending on the company—and the deal you negotiate when you join—you may be able to establish hours that work for you and your family.

But take note! You’re probably going to have to work nights and weekends because you have to be available when clients need you.

There are different ways to measure your professional growth. One of the most obvious is whether or not you’re making more money as you gain more experience. But you may also want to know that you are being given more responsibility (and getting paid for it), taking the lead on the big deals, mentoring new hires (and possibly getting paid for that), and if appropriate or desired, being offered more senior titles in the company—maybe even some kind of financial stake.

Everybody loves a winner. If you’re successful in bringing in new clients and closing a high volume of loans, you should see the financial rewards.

Titles may or may not mean much to you—titles can be cheap; money talks. But there is a hierarchy in many companies and you can judge if you’re moving along it at an appropriate pace. For example, you might move from mortgage consultant to senior mortgage consultant to vice president, and finally maybe even president of the company.

The Least You Need to Know