Are you trying to learn how to start a mortgage company? If yes, you should check out our guide here on the key steps to take.
Forming your own mortgage company can be an exciting venture, especially if you excel in the area of finances. It’s also a way to help people achieve their dreams of owning a home.
However, this type of business formation isn’t as straightforward as opening a brick and mortar retail shop. The process is much more complicated.
To help you out, we’ve created this step-by-step guide on how to start a mortgage company from the ground up.
Create a Thorough Business Plan
Every new entity needs a detailed business plan. This helps layout short and long-term goals, marketing initiatives, and financial milestones.
You’ll need to decide whether you want to focus on commercial or residential mortgages. It’s also important to predict the volume of transactions you expect during your first year.
Finally, your business plan needs to outline budgetary details. This is important if you plan on seeking a business loan to get started.
Get NMLS Certified
All mortgage companies must become certified with the National Mortgage Licensing System (NMLS). Think of this organization as the official registry for all mortgage and lending entities.
The first step in getting certified involves filing Form MU1. This form includes basic business and financial details.
The NMLS will also check your credit and conduct a background check. Finally, you’ll need to pass the NMLS exam, which covers state and federal mortgage lending regulations.
Get Licensed in Your State
Another requirement of all mortgage lenders is state licensure. You’ll need to get this after you’re NMLS certified.
Every state has its own licensing agencies that deal with mortgage and lending institutions. Depending on your state, you may have to register with more than one agency.
Be prepared to provide a business plan and a credit report. You may also have to participate in an educational course to get licensed.
Outfit Your Business With the Right Tools
Once you’re licensed and ready to do business, it’s time to invest in the essentials. It’s important you have everything you need to do business right out of the gates.
If you plan on operating out of a physical office, you’ll need computers, software, furniture, and supplies. Look into getting the best CRM for mortgage brokers so you can automate the customer service process.
Once you have everything you need, make sure to get adequate commercial insurance.
Start Marketing Your New Business
Your success over the first year has a lot to do with the way you market your business. You’ve likely defined your target audience in your business plan. Now it’s time to reach out to them.
Creating a high-quality website is a good first step. It’s also important to establish a social media presence.
Finally, networking is crucial in the mortgage industry. Build your contacts by attending local business conferences, listing your business in online directories, and registering with the Chamber of Commerce.
Understand How to Start a Mortgage Company the Right Way
When starting your new business, the last thing you want to do is dive into the deep end unprepared. This could end in financial loss.
Use these tips on how to start a mortgage company discussed and take the smart approach.
We hope you enjoyed this article. Feel free to browse our site for more start-up information and advice.
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