Business Overview

Buying a home or owning a business is a dream many people have. But, getting a loan to buy that home, a piece of land, or an office building can be difficult. Lenders don't always want to talk to a small business owner or even a renter looking for a home. A mortgage brokerage business acts as a middleman between the borrower and the lender and can often negotiate deals with lenders that the borrower couldn't do on his or her own.

Who is this business right for?

Owning a mortgage brokerage business is not for everyone. You need to have a special affinity for numbers and finance. It also helps to have at least a basic understanding of the banking industry, and specifically the mortgage industry. You should be detail oriented and good with numbers. You also should have a passion for helping people. The mortgage business is highly commoditized. The most successful brokerages are those that build relationships with their clientele.

What happens during a typical day at a mortgage brokerage business?

Your day starts by collecting applications. The review process can take some time. Some borrowers don't have good credit and need help with their credit report and score. Others just need to find the best deal in the marketplace.

This is where you come in. Brokers who work for a mortgage brokerage business spend a significant amount of time emailing and calling lenders, using online quoting systems, and talking to their contacts in the industry about the best products available for their clients and customers.

They take applications, sort them, and talk to potential borrowers about what they qualify for. They also follow through on those applications with the lender to make sure all paperwork is in good order and that they are complying with all federal lending regulations.

What is the target market?

Target market for this business includes businesses looking for commercial property, individuals and families looking for residential home(s), and investors looking for real estate or rental properties.

How does a mortgage brokerage business make money?

This business makes money by receiving a commission (a percentage of each loan) in return for bringing customers to the lender.

What is the growth potential for a mortgage brokerage business?

The firm can be small or large. Typically, a small mortgage brokerage firm consists of a team of 1 to 5 people. If you own and operate the business, you can run the business out of your home. However, most brokerage firms operate out of an office, since most borrowers want to meet with a mortgage broker in a professional setting.

HomeSure Lending, Academy Mortgage Corporation, and Crestico are all examples of large mortgage brokerage businesses.