Becoming a mortgage broker

Hiya

I’m with choice – they won’t send you leads.

Cheers

Jamie

Agreed but boys the Aggregator most of us belong to wont take David without a minimum of 2 years experience.

Hate to say it is a big bad world out there and you probably have to accept you will accept 12 months trying to get referal networks built up tying yourself in with an Accountant / Financial Planning firm etc etc. 

Cheers

Yours in Finance

Hi all, these are the options that I have in place at the moment:

1) Join a franchise, however the thing I would like to learn more about is the commission splits that certain franchises take such as mortgage choice, smartline, rams etc… is approximately a take of 40% on upfront and trailing on all loans standard for franchises as it seems fairly high?
How generous/helpful are they in providing leads and referrals as opposed to if you were to start out by yourself and try generate new leads and clients through your own strategies? Because this is the area that concerns me most and the main reason why I would consider joining a franchise model, however if the help they provide isn't proportionate to the commission they take off each loan settled, it would seem more beneficial to start up with an aggregator.

2) Get my previous broker to act as a mentor for me as I have less than 2 years experience and join Choice as he is with them as well. Start my own marketing and referral campaign and work extremely hard to get referral partners at the start, let all friends and family know that I intend on becoming a mortgage broker and have them work as referrals. Although I am unsure of the commission splits certain aggregators take or whether it is a standard between all aggregators?

sam2009856 wrote:

Hi Everyone

I noticed that all the brokers that posted comments made mention that it is a very hard industry and hard to make money.

I have gotten rid of 4 brokers in the past 18 months, from scheming, lying and acting in their own bests interests.

I take out a loan on average once every six months.. I am a long term repeat customer.

Do you not believe that if you act in your clients best interest over time, you will be flooded?

Just to confirmt that in W.A. you must have a mentor, either an individual with a B class licence or join an aggregator.

1. Do you Cert IV
2. Find an aggregator to mentor you, you must do this for 2 years
3. Apply for your own licence and work solo

Make sure you interview the aggregators… each will take a different percentage of your commission and make sure they provide you with a plan of how they will train you and what they have to offer. Some may even offer you a certain amount of leads.

For eg. there is one in Perth and you have to sit at their office every Wednesday all day to be trained. This is invaluable. many will not even set you up a proper program.

Remember your business will also come from building a relationship with other businesses who will refer your services to other clients. ie. real estate agents, financial planners….. you get the gist.

GOOD LUCK!

I agree totally! I am current a Nurse and working full time but my passion lies in property investment. We have a brilliant broker (Martin – Mortgage500) who we have been using for 3 years since our first property investment. I can fb message him, call him or email him with the smallest question and he gets straight back to me. He is my mentor and someone who I can ask any property question. Since investment is my passion I would love a job that in some way is to do with investment. Right now I am considering Brokering and that’s how I found this forum. I think that your quote above is right. Martin is everything you could ask for in a broker, hence he is so busy! Im not 100% sure if I will go down this track but I would like to with Martins support.
Thanks for all the useful comments, Ive really enjoyed reading this forum.

I am with Alistair it is so crazy at the moment it is hard enough to keep up with current forum enquiries let alone take on a Mentor.

10 years ago i Mentored a couple of guys who went out on there own here in Brisbane and are getting by.

I am with FAST so depending where you are located i might be able to refer you to someone.

Cheers

Yours in Finance

If they bring in a minimum Degree standard (Finance related) which is one thing being considered I think it would be good for the industry.

As part of your License or ACR requirement ongoing education is required.

Cheers

Yours in Finance

• This reply was modified 9 years, 8 months ago by  Richard Taylor.

I have been in the industry for 28 years both here in Australian and in the UK so welcome to Finance in 2015.

Compliance is the order of the day.

As a Financial Planner also the requirements for broking are going along the same lines as Planning.

Still see many a broker who has never purchased an investment property giving advice to a potential investor when they are paying off their PPOR. The whole industry is a joke.

Cheers

Yours in Finance

regarding mentoring, what is the usual method for this process as required by the industry associations?

I have seen some programs charge zero dollars and some as high as $1000 per month. if it is on split of commission, what is the fair split between mentor and student? or can the mentor be paid a fixed amount or percentage of the upfront commission base on each loan settled by the student?

I have heard a few stories that the aggregator pays the commissions directly to the mentor, but the mentor just don’t abide by his contract with the student so the student doesn’t get his split. and the aggregator just refuse to intervene on the contract between the student and the mentor.

after heard of these stories, is it better for the aggregator to pay directly to the student, then the student pays the mentor. or perhaps the aggregator pays the agreed split to the mentor and to the student, to avoid the above kind of stories.

like to hear your experience, please share

Corey,
what is that “x” and “%” which would be adequately fair for this relationship?
say if the aggregator find you a mentor and you both write directly for that aggregator, it would be simple for the aggregator to split the commissions, to avoid the bad stories. the bad stories deter other potential brokers from the industry?

I prefer the % split of the upfront commission, but the student keeps 100% of the trails. this way, the mentor has to work hard to help the student in writing loans. the more loans the student write during the mentoring years, the more the mentor earns, so it is incentive for the mentor to work with the student. normally the aggregator take 10% of the gross commission already, so what would the mentor take? should not be more than that of the aggregator or what?

say a $500k loan on upfront 0.60% is $3000 gross commission, and the aggregator’s 10% would be $300. would a 1% ($30), 2% ($60), 3% ($90), etc be sufficiently fair for the mentor to make sure the student write the loan properly? during the first year the mentor may need to help the student a lot, but I can’t imagine what else for the mentor to do doing the second year.

compare to the real estate industry, I heard that you get your Agent’s Rep certificate then work one year under a licensed agent, then you can get your real estate licence. why in the mortgage industry is two years? if compare to the university system, in two years most graduate students would have earn an MBA already; so is the MFAA trying to say that their two years mentoring is equivalent to an MBA? this self regulating requirement seems to be those who are already in the industry just trying to make it difficult for those who wants to come into the industry, and the lenders are pro this too.

Hi all,

I have been thinking becoming a broker for a long time, and finally this I enrolled myself Certificate 4.

Just wondering what is different between MFAA and FBAA ? ( all I know is MFAA needs diploma and FBAA just required Certificate 4) ?

What about the aggregator ? Does most of the aggregator require to brokers to have MFAA or FBAA ? or it does not really matter ?

Thanks in advance

• This reply was modified 9 years, 8 months ago by  TaylorChang.