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Becoming a mortgage broker ...

Discussion in 'Property Finance' started by hillsguy, 4th Sep, 2015.

  1. hillsguy

    hillsguy Well-Known Member

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    Hi all, now that I have a good understanding of how to become a real estate agent (thanks to all who replied to my post) ... I am wanting to also explore possibility of becoming a mortgage broker.

    Anyone here keen to share few things like -

    1) how do you become one
    2) how did you get started ?
    3) What kind of salary to expect at the beginning ?
    4) Are the trailing commissions changing now with APRA stepping in ?
    5) The good, bad and ugly

    Thanks again everyone ... loving this forum !
     
  2. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    1. To become a mortgage broker you get the appropriate qualifications and memberships. You can find more detailed information at www.mfaa.com.au.

    2. Get a job working for someone else, or start your own business. You need a mentor for the first 2 years, you'd expect an employer to organise this, otherwise you'd need to find someone willing to do it.

    3. Some employers may pay a salary or a retainer, it won't be much. Most of the industry is commission based. You earn money if you get results.

    4. There has been some comments about commissions, but I don't see them gaining any serious traction.

    5. Here's a thread discussion this topic from Somersoft:
    http://somersoft.com/forums/showthread.php?t=105542
     
  3. D.T.

    D.T. Adelaide Property Manager Business Member

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    Peter (or any other broker) - what would you consider to be achievable volume per month for a 1st year broker to justify having his own business?
     
  4. DaveM

    DaveM Adelaide Buyers Agent & KFC Strategist Business Member

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    Like any new biz if you start from scratch, expect 1-2 years of ramp up time to replace a full time income. Ensure you have a cash buffer to live off
     
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  5. Steven Ryan

    Steven Ryan Mortgage Broker Business Plus Member

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    7-figure monthly loan volumes average across year 1 would be a reasonable baseline goal–if you are driven.

    $1mil a month will have you around the average full time Australian income. $2mil double. And so on.

    1) Did a 5-day full time course (joined by @Michael_X :)). After were assignments, then then company setup, lender accreditations etc. Bit of time involved there.
    2) Found an amazing mentor. Let a few folks know what I was up to.
    3) Expect little, want lots. As Peter says, it's results-based income.
    4) No.
    5) Good: Having a significant positive impact on clients' futures; challenges; growth; doing something I am enormously passionate about; building an asset; can work just about anywhere on earth. Bad/Ugly: APRA changes; only 24 hours in the day.
     
  6. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    Have a healthy cash buffer before you start, or a partner who can cover living expenses. Aside from taking time for people to know what you do and knock on your door, there's a lag in income. Ie - you write a loan today, it settles in two weeks and you get paid for that settlement the next month. Depending where in the month your settlement falls it can be almost 2 months till you get paid for it.
     
  7. Redom

    Redom Mortgage Broker Business Member

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    Some great advice above.

    Have a read of this: http://www.mpamagazine.com.au/secti...iving-new-brokers-the-best-chance-204553.aspx

    A couple from me, work out what type of broker you want to be. Have a vision for your business, what it stands for and what you'd like to achieve. You will need it. Also, develop the habit of learning everything you can of the successful ones. Their knowledge, their processes, how they run their businesses, how they conduct themselves, who they are, everything relevant to being a broker. IMO the best are typically secure in themselves, willing to share and love promoting the industry (and new entrants!).

    Downsides: get ready to put out spotfires constantly, if you have 20-30 deals running at the same time, something will pop up one day or another. It can be a very demanding, stressful job, getting some of those borderline deals from zero to yes. You'll invest enormous amounts of effort on some files and much less on others. @Colin Rice said to 'develop thick skin', very true. If you like this kind of job, you'll LOVE this (its energising!). There's a joy associated with getting some pretty tricky deals over the line.

    From a personal front, find a way to disconnect from work. As a first year broker this can be difficult, as it becomes your life/dream/passion. But it will consume you if you don't have a switch off button or mechanism to tune off. Hang around babies or something - my little niece is wonderful! :)

    Stealing Steven's line, 'Sky's not the limit' - first year 'passmark' benchmark would be around $12mill IMO. It'll cover your costs and give you a graduate type salary. Plus it's a decent base to work from for year 2 where it should get easier. In saying that, there's no reason why a first year broker can't crack 40-50-60m+. There's numerous examples in our industry, its rare, but definitely possible. I'd probably put this at about the limits one can go to without having some staffing involved too.

    Cheers,
    Redom
     
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  8. channon

    channon Member

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    I am looking at a possibility of becoming a broker as well so any input will be grateful.

    Had a chat to a few "aggregators", some will give you leads and some don't.
    Obviously, the ones that give you leads take a much bigger cut from your commission.

    As a starter, which ones would be easier - I would be thinking join those ones that give you leads to build up confidence then start out on your own after you have learnt the ropes?
    Generally when you leave, some wont let you keep your trail, but otherwise I don't think there's any other exit clauses (not 100% sure as I haven't seen the agreements)
     
  9. D.T.

    D.T. Adelaide Property Manager Business Member

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    I'm not a broker, but I'd think giving the Agg a cut would be a fast way to earn mediocre money.
    If you truly want to do this, you really need to be getting your own leads by being heavily involved in networking, community stuff, social circles, investment circles, etc.
     
  10. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Dont count on these aggregator leads. They are generally tyre kickers and not serious and few will go anywhere.
     
  11. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    If you're going to an aggregator looking for leads, you're going to be disappointed. I've yet to hear a broker talk about how great the leads their aggregator provides are.

    Over 80% of new brokers drop out of the industry within the first 12 months due to lack of income.
     
  12. Steven Ryan

    Steven Ryan Mortgage Broker Business Plus Member

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    Is easy what you are after? :)
     
  13. channon

    channon Member

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    It's just that I was reading a lot of brokers drop out within the year, so was thinking was the best way to avoid becoming demotivated :)
     
  14. D.T.

    D.T. Adelaide Property Manager Business Member

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    It's not motivation that kills most, it's cashflow. Same as any business. Need to be generating leads every day and convert them into clients and keep them as clients.
     
  15. Steven Ryan

    Steven Ryan Mortgage Broker Business Plus Member

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    Providing you have a reasonable buffer, get motivated enough that nothing will stop you :)
     
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  16. Redom

    Redom Mortgage Broker Business Member

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