I often get asked by Accountants “Can I become a mortgage broker and write the loans myself”.
The simple answer is yes, of course. However, the correct answer is “Should you”? And here is why.
Certificate IV and Diploma of Mortgage Broking;
The minimum entry level qualification is the Certificate IV in Mortgage Broking, with most bodies asking the diploma is completed within 12 months of becoming a broker. However, as an accountant you will get a lot of prior recognition within the course. Generally, this reduces the course by 3-4 units and will save you a considerable amount of time.
However, there is still a considerable amount of work to complete to pass this course. Then after this at some stage you will need to complete the diploma of mortgage broking. Which is more time. The cost is minimal at around $500 to $800 depending on where you study.
Again, it is not the cost that is the issue it is the time it takes to complete it that is the issue.
2. You will need a mentor
So, you have your Cert IV or Diploma. Now you will need a mentor. The industry demands at least 2 years under mentoring. Now you can get a broker who can mentor you or a full-time mentor.
The difference will mostly be in their availability and the quality of advice and service you will receive. Of course, there is a cost with this generally around the $300-$500 per month mark.
A good mentor will do the following well:
- Be available when you need them
- Have an excellent understanding of the mortgage industry, lenders and other important stakeholders
- Be up to date with lender policies and procedures
- Know compliance backwards
- Know how to generate business
Of course, there is more than this but it is a good list to start with
3. How long does it take to write a standard home or commercial loan?
The short answer is longer than you think. A lot of the time taken with writing home loans is the compliance component and gathering the right documentation from the clients. Although you will have the income documents of course, there is still a lot to gather. Added to this the time to data entry, lodge and follow the loan through to settlement and the average time taken from start to finish ends up at around 12 hours per loan. There are ways to automate some of these areas and perhaps engage with economical and efficient loan processing services that can cut your time down considerably.
Warning: This is where a lot of Accountants who become brokers get most frustrated and give up. Just make sure you put as many systems and processes behind you as possible.
4. Will your clients want you to write their loans?
Probably. Unless they have a trusted broker they have engaged with previously. One of the most common objections I hear is “My clients won’t want to use me for this service”. Well I can honestly tell you they trust YOU more than anyone else they deal with so that is a good start!
The hurdle in getting your clients to have you write their loans is going to be YOU. The way you market yourself and educate your clients on the availability of this new service is crucial. It will not just happen in most cases. And you would need not be alone in this area as there are a lot of companies that can assist you with your marketing. (us for one :-))
5. What will it do for your business?
The million-dollar question right? Will it be worth it?
The answer to that question depends on what you are trying to achieve, the size of your client base and most importantly – How much time you can set aside for this role.
It can be a very lucrative addition to your business if a lot of your clients are low-maintenance and you have the time. Again, TIME will always be a thorn in your side. I have seen more than my share of Accountant-brokers go through the trouble of becoming a mortgage broker and then not actually use their credentials because they realise it takes too much time out of their core business. We do have some suggestions that can counter this along with an inhouse loan processing team that can give you about 75% of your time back for a very low fee, or buddy up with another broker to form a JV partnership. The choice is yours.
If you’d like us to run our eyes over your plans of adding mortgage broking to your business feel free to call at any time.
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