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Mortgage Broker Career

Discussion in 'Property Finance' started by York, 14th Oct, 2015.

  1. York

    York Finance Broker Business Member

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    Hi guys,

    After some research and thinking, I am in a stage in my life where I'd like to have a change in career. I'm currently in business in hospitality.

    Although it does have its perks like decent cashflow, I have realised money isn't everything and I'm finding myself increasingly unhappy due to several factors out my control like poor partnership choice and ridiculous 6am starts and 10pm finishes. I have a family and it's really getting to a point where I'm not seeing them much.

    To the point, having a passion for property and all things related, I was thinking a change to Mortgage Broking might be an option for me.

    I know this thread should be on the Small Business threads but haven't seen many MB posts so I thought I'd put it here where most MBs frequent.

    I currently have Mondays and Tuesdays off. I know that a career in MB takes some time to start seeing any money. So is there any chance I could continue with my current work to support myself and family and try work to start off in MB part time on Monday/Tuesday?
    Or is this an unresonable idea?

    Another question. I know the minimum qualification is Cert 4 and after Dip. In MBM. Which I know I'll have to study for. But the part that I'm having a hard time understanding is how mentorship works for people without experience. I have heard some real nice stories by some brokers who found a real gem of a mentor who sincerely helped them in their journey. But how does one find such a mentor. I've seen some mentorship programmes with 100 people in a huge conference room being 'mentored' for a huge fee. Is that what mentoring is? Surely can't be that indirect. I mean how does the day to day stuff work if you need help from your mentor?

    Anyway, just some thoughts I'm having. Please feel free to give any advice or opinion if you were once where I am or started off in a similar way.

    Other info: I have a bachelor degree in business and some public practice experience in Taxation. Also from Sydney. I'm 32.

    Thanks for reading and for your comments.
     
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  2. House

    House Well-Known Member Premium Member

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  3. Azazel

    Azazel Well-Known Member

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    Good on you for looking into changing careers! It can seem like a daunting leap.
    There has been a bit of information on it around (as above from Alex), I'm sure some of the other brokers will be around to fill in some of the details.
    And good luck!
     
  4. Corey Batt

    Corey Batt Finance Strategist Business Plus Member

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    Realistically you won't be able to be a mortgage broker only committing 2 days a week - it's a nearly 24/7 operation.

    Client's will want timely responses to emails/calls, likewise files need to be actioned quickly once received in - if it's 3 or so days until you can put in a few hours work you won't meet deadlines and give a general poor customer experience. This isn't even factoring in the copious amount of industry on the job training required.

    Realistically the get it started up whilst having a secondary income to manage your cash flow, you'd need the inverse time table so you can commit Monday-Friday.

    It's a great industry to be in, but do be warned that their is a massive burnout rate with brokers - a tiny percentage make it past year two in the industry. Majority of it will be from stress. I've seen quite a few people think it will be a cake walk, only to leave the industry within a year.
     
  5. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Now is probably the worst time to be joining too. It is so difficult to get loans approved.

    Alternatively you might consider it the best time as you can get your feet wet and then be fully ready for the next lending boom.
     
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  6. York

    York Finance Broker Business Member

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    Thanks for the replies guys. Thanks for SS link @AlexH. @Corey Batt I'm self employed and therefore I spend my time at work as I wish. I suppose I could take advantage of this? I also have Sundays off. Which I could use for extra leg work? I'm not a disillusioned person. I know that good things take time and effort. I wouldn't expect to just walk in and start 'making it'. I just thought doing the qualifications now and making an attempt would at least help me break in and really give me an idea if I have chance at it. Dreaming about it isn't going to get me anywhere. As @Terry_w said I'd be getting my feet wet. Thanks for the encouragement @Azazel.
     
  7. York

    York Finance Broker Business Member

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    I know at lot of emphasis has been put on the early stages and making sure the 'mentor' part is in place. I think a strong and healthy relationship is vital to enable the mentee to have the best chance to succeed. No doubt the mentor has to have some kind of gain also. Would I be right in saying this?
     
  8. Redom

    Redom Mortgage Broker Business Member

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    Hi York,

    Good on you for proactively seeking other opportunities. IMO its a brilliant industry to be in. Currently it is exposed to heightened levels of regulatory risks, but does give you the scope and opportunity to do very well, help educate consumers and add value to society/marketplace productively.

    In terms of finding a mentor, pick up the phone and give a few people a call. If you're calling some good people, their likely to value their time quite highly and the time investment in mentoring is quite high, so it'll likely cost you a fair bit (or a large commission split).

    I think Terry's quite right about the time to enter to market, there'd be a huge influx into property related industries as its the boom industry right now. Its unlikely to be the case in 2 years time. Its probably already cooling with the latest round of changes, rate rises, etc. That may be something to consider. If you think about it as an 'investment', think of jumping into the industry as buying in western sydney as an investment now. You're probably aware what the market will be doing over the short/medium term. Nonetheless, you can of course do very well anyway.

    Processing loans may be tough if you leave it unattended for 3 days - thats just going to lead to poor service. However, if you have time to spend 1-2 hours a day on the days your working to process loans, send a few emails, update, etc, you may be OK. Realistically you'll only have a handful of deals running at the same time when testing the waters. If you get past 5-10, you won't be able to do 2 days a week anymore.

    Noting your reasons, i'm not so sure its a career to get into if your after more time - its a very demanding job once your in the full swing of things. In todays world, its not 9-5. Clients don't call during 9-5 all the time, they're at work. Customers are demanding brokers to be available around their needs - that means nights and weekends (the usual 'family' time). Add to that all the administrative joys of running a business, and you have a very healthy workload.

    Cheers,
    Redom
     
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  9. York

    York Finance Broker Business Member

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    Thanks for your advice Redom. I understand what you mean about bad timing. I agree with your investment analogy. Like I said I'm not looking for a quick buck. Of course I wouldn't leave customer needs for 3 days. That wouldn't be acceptable. But I have full control of time where I am now. I could easily use that time looking after customer needs. If I find I'm not having enough time to look after my customers I can lessen my load at by business and spend more time with MB. I have 2 partners and they know I'm looking at transitioning out in the short term.
     
  10. tobe

    tobe Well-Known Member

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    I made the leap from chef to mortgage broker 15 years ago. Great career move, for me anyway. long hours, working with kids who didn't want to be there, coming home smelling like onions, not a great deal of money. I'm sure you know the drill.

    I was lucky enough to start before they had a formal 'mentor ship' program. I was employed by a broker, and spent 6 months processing his loans, answering phones, sitting in on client appointment etc as well as doing the 'training' etc. I worked for him 9 to 5 plus probably 2 or 3 night appointments a week for $300, and made about the same shlepping eggs in fitzroy on the weekends. It was amazing how refreshed I felt with the reduction in hours!!

    You do need to dedicate at least weekdays 9to5 to mortgage broking. You may be able to supervise another business around this, but it wouldn't be ideal. If your worried about the cost of mentorship, use one that takes a split rather than dollar value, maybe even have a rachet clause that incentivises on voluem. I would personally suggest a 'high volume' franchise/aggregator group that helps with leads. A great deal of the learning in the early days is about seeing a lot of people, getting a feel for the process. You can spend days working with one client scenario who doesn't return your calls, or have 4 keen as mustard types sign applications and do everything you want who have defaults or have something else that precludes them from lending.

    The main thing is having a passion for helping people.

    Overcooking someones steak is embarrassing and can ruin someones night out. Mucking up their mortgage can have huge implications. The reverse is true as well, having a great mortgage broker can transform peoples lives. Something I'm sure many of the contributors here would agree.
     
  11. York

    York Finance Broker Business Member

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    Thanks for your reply @tobe . That's exactly how it is with the onions and working with kids that don't want to be there. Exactly.
    OK. ..so seems I'd have to get out first then make the next step. Fair enough.

    We'll thanks to all who gave their opinion. I got the answers I was looking for. To be honest I wanted to be able to do with at the same time as what I'm doing now. But seeing as it would be very difficult and may compromise my service to customers, I'd rather do it the right way and fully commit.
    Just need to find the exit door in all this darkness..
     
  12. Azazel

    Azazel Well-Known Member

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    Keep doing the planning and you'll get there soon enough. I've got friends who studied degrees and changed profession as adults - has to be a little quicker than that, surely.
     
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  13. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    Agree 100%

    Mentors will expect to get paid for the time/effort. It's generally in the form of a commission split for loans that you settle.

    Having said that - the money itself is not usually enough motivation for a decent broker to mentor (there's an opportunity cost for them - time spent mentoring is time not spent on other facets of their business). The really good mentors do it as a way of "giving back" - they've done well out of the industry and want to help others achieve.

    It's important you click with your mentor - it's an ongoing relationship that will likely continue for a number of years.

    Agree with the general sentiment above about it being a terrible time to enter the industry - but doesn't mean you can't be successful. In fact - new brokers starting out fresh probably won't be as bitter about all these changes. They won't know any better.

    Cheers

    Jamie
     
  14. York

    York Finance Broker Business Member

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    Thank you for your reply Jamie. Yes I known of a certain mentor that helped a few brokers on this forum. From what I understand, the 'deal' hugely favours the mentee. But the mentor isn't doing it for the money. It's about giving back to genuine people in the industry. I'd rather use with a broker who was mentored by an excellent broker than one who's mentor's objective was the commision split above all else. Congratulations to those of you who has an excellent mentor. I'm sure his wisdom and experience will resonate with you throughout your careers.
     
  15. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    The two most common remuneration models for mentoring (other than becoming an employee of a broker) would be a fee structure during the mentorship period, or a commission split. Both have pros and cons.

    Some sort of fee structure tends to favour the mentor during the first 2 years. They get paid for their time and efforts, regardless of the new brokers performance. After that the new broker usually doesn't have any further obligation.

    A commission split usually favours the new broker initially. The amount of time and effort that can go into training a new broker often outweigh the income from the arrangement, but if the new broker is hugely successful, the mentor certainly benefits as well, often more so than if they were charging a fee.

    A fee structure might cost the new broker less overall, but the mentor doesn't necessarily have a vested interest in the new brokers success. A commission split may cost the new broker more in the long run, but the mentor has a vested interest in the new brokers success, they almost certainly loose money if the new broker isn't successful.

    In either case, how fair it is to either party can depend on what's actually included and obviously the actual fee or percentage charged. There's a lot of other business costs that a mentor might be able to included such as insurances, aggregation expenses, licensing. The extended relationship after the first 2 years also needs to be considered, that's just the apprenticeship period, great business relationships still help each other out for decades afterwards (and it does go both ways).

    I can also assure you that regardless of the remuneration model, unless your mentor is building a business around mentoring, their primary motivation isn't the money.

    I've seen both work and both fail for both parties. Success of the agreement generally depends on relationship between the two individuals more than anything else. Don't get too hung up on one model or another. Find the right person for you.
     
    Last edited: 14th Oct, 2015
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  16. Steven Ryan

    Steven Ryan Mortgage Broker Business Plus Member

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    How many months of living costs do you have stashed away?

    Another option is to find a mentor, get your qualifications/accreditations, start building and take a leap of faith as soon as you can.

    Working on your broking business full time is ideal for both your clients, and yourself.
     
  17. York

    York Finance Broker Business Member

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    Proceeds from the sale of my business will buy me about a year of living expenses. That's conservative.
     
  18. Steven Ryan

    Steven Ryan Mortgage Broker Business Plus Member

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    If your passion is strong and belief unshakable, consider lining up your ducks then diving in.

    In the next 3 months you ought to be able to find a mentor, complete qualifications, set up company, join aggregator, get accredited and begin building-all on the side.

    From there, if you're motivated (going full time can help in that department), should be a 3-9 month process until you have a client base to sustain you and see income start rolling in after the lag period.

    Won't be easy but most significant things in life aren't :)
     
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  19. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Most ??

    ta
    rolf
     
  20. Azazel

    Azazel Well-Known Member

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    Good to hear your recent experience Steven. How long did it take you to transition once you pulled the plug on your job?