New to Mortgage Broking

Discussion in 'Loans & Mortgage Brokers' started by footballfranky, 19th Jan, 2017.

Join Australia's most dynamic and respected property investment community
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Should I jump straight into the deep end and work independently?

  1. Yes, start your own business and retain the higher commissions

    4 vote(s)
    21.1%
  2. No, get some experience first

    10 vote(s)
    52.6%
  3. No - Mortgage broking is not a good industry to get into

    5 vote(s)
    26.3%
  1. footballfranky

    footballfranky New Member

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    I am new to the mortgage broking industry so I'd like some advice from the already established brokers out there. I am confident in my ability to acquire clients but I wanted to know whether you guys think it's better to work for an established broker and get $500/week plus 50/50 commission split -- or invest 20k into setting up business independently with a mentor, have no base salary but keep 90% of commissions?
    Any suggestions will be greatly appreciated.
     
  2. tobe

    tobe Well-Known Member

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    You will learn a lot more imo working for someone else than solely with a mentor.
     
  3. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    The question is do you want to work for yourself with all the costs, challenges, massive risks and (longer term) rewards that can bring? Or do you want to work for someone else with more stability and better short to medium term income, but you don't own the business?

    I also think it's a very challenging time to get into mortgage broking. Those that are established and can work through the current challenges are doing well, but it's a very tough environment.
     
    Last edited: 19th Jan, 2017
    JacM likes this.
  4. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    If you can find clients then go it alone.
     
  5. Jess Peletier

    Jess Peletier Mortgage Broker & Finance Strategy, Aus Wide! Business Member

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    Go out on your own, find a brilliant mentor and be a voracious learner.

    The last thing is the most important - if that's not you, get employed.
     
  6. Lil Skater

    Lil Skater Well-Known Member

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    Not a mortgage broker, but do run my own company.

    Running your own business is great, but it's also extremely challenging at times. I don't believe experience is necessary, but it helps and makes sure you actually know what you're doing before jumping into the deep end.

    If you're really keen to go straight in though, make sure you find a great mentor that can teach you all you need to know.
     
  7. tobe

    tobe Well-Known Member

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    What do mentors do? I qualified before the mentor system, and haven't had much to do with them, apart from new brokers complaining about how little they do.

    They do credit, structure, compliance? Someone to run scenarios past basically? If you can get hold of them.

    They don't do sales/lead management, marketing, business structure etc?
     
  8. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Mentors charge a fortune and do nothing other than say they are mentoring clients.
     
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  9. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Do you have a burn or dream to serve people and improve their lot in life ?

    if yes,and you are "confident" in some form of marketing working for you, and your are "teachable", running and building your own " baby" is simple but not obvious, and can be much more personally rewarding.

    The core issue I find with working on a comm share is that often people end up in the same trap they are looking to escape.................

    There are right people that can do the employment and comm share thing super duper well, but there arent many, because you need a great business to work with AND you need to be the right person to engage with that business.

    As Steve Ryan has re-coined and I paraphrase............... do what needs to be done, not what you are willing to do.

    ta
    rolf
     
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  10. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Improve people's lives usually .............. but that is my old man's pre modern era definition.

    ta

    rolf
     
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  11. Redom

    Redom Mortgage Broker Business Plus Member

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    If your confident on getting clients on your own, you've done the hardest part.

    The rest is relatively learnable with a good teacher and learning ability.

    Best to also allow for one years cashflow. It takes a while to generate and earn revenue, longer still to receive income.

    The first part (lead generation) is probably harder than you realise. Plenty of people begin thinking that there friends and close networks will generate them plenty. Often it doesn't translate as much as expected.
     
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  12. tobe

    tobe Well-Known Member

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    Most comm share expect you to bring in the majority of the business, but some supply leads. I'd suggest that's the best way to start. They have an interest in getting your loans settled, and getting you up to speed. After 6 or 12 months you'll have a much better idea if the business and some ideas on how to best set up your own.

    Don't worry about 'losing' clients to comm share. They come back to you at your next role, if you have done the right thing.
     
  13. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    You do need a mentor to become a mortgage broker if you're new to the industry. For starters it's actually a requirement of the associations (which you have to be a member of) and most aggregators.

    I don't disagree with Tobe & Terry's assessments that they take a lot of money and don't do much, this is something I've contemplated having been on both sides of the fence.

    Realistically though a newbie has no hope of getting started without help. People do the certificate IV, the software training and they still have absolutely no idea how to submit a loan, let alone understand lender policy, structuring, processes, even though they've theoretically been trained by the formal courses and lenders.

    What really happens is mentoring a lot of help in the first 6-12 months, dropping off steadily after that. The 2 year requirement is a bit of overkill IMHO, although I still get the guys I've worked with asking the odd question and these days I learn just as much from them. Overall I'd say having a network of other brokers you can work with is what's really valuable.
     
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  14. D.T.

    D.T. Specialist Property Manager Business Member

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    I think anyone that says that hasn't had a good one
     
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  15. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Of course I was exaggerating a bit here.

    I have heard of some mentors that sign em up and literally do nothing after that. But others giver varying level of support from checking files before submission, advising on the lender to choose, appointing the new brokers as credit representatives too.

    What do these mentors charge like?
     
  16. Pamela Palmqvist

    Pamela Palmqvist Active Member

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    I have just started my own mortgage broking business after sub-contracting under other businesses for 3 years. I can honestly say what I have learnt working next to, and rubbing shoulders with, other brokers have been invaluable.

    Mortgage broking has a low barrier to entry, but without the right brokers around you, becoming great in this industry is hard. You wanna be the best and having the right people around you will save you heaps of time in getting there.

    Best of luck!
     
  17. footballfranky

    footballfranky New Member

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    Thanks guys! I genuinely appreciate everyone's feedback.
    My plan is to work for 6 months for this established broker - learn the trade and some tips and tricks - and then venture out my own. I believe getting accredited by dozens of lenders will take some time, so in the meantime I will also begin the process of structuring the business, finding a top notch mentor, devising a marketing and sales strategy and overall just getting things in place so that when 6 months rolls around I'll be ready to go.

    I'll keep the thread open anyway and provide an update every once in a while on how things are going.

    I've got so many marketing strategies in my head right now. I can not wait to test them!

    Thanks again everyone
     
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  18. Corey Batt

    Corey Batt Well-Known Member

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    Good luck, you're definitely coming into a turbulent time in broking!
     
  19. Marty McDonald

    Marty McDonald Mortgage broker Business Member

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    The only constant is change. Me personally I would be waiting for ASIC's report on mortgage broker remuneration / commissions before leaving my day job.
     
  20. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    I am expectign a big cut in both upfronts and trails.

    With the growth in property prices broker income has been increasing at rates higher than inflation.

    I think they cut back in around 2006 too. Ups were 0.80% and trails 0.30% in the good old days.