How to Set Up Your Small Business as an Independent Mortgage Broker

Setting up your small business as an independent mortgage broker is no small feat. And to be successful, you need to lay some groundwork before you can start taking on clients. While it can seem overwhelming at first, we’re here to help you every step of the way.

Let’s take a look at some of the first steps you’ll need to take to get your business up and running.

1. Choose a business name

First things first: You’ll need to choose a business name and register it with the state(s) in which you plan to do business. It’s also a good idea to check if the URL you’d like to use is available.

2. Set up your business entity

You’ll need to set up your business entity, which essentially means setting up an organization to conduct business, and determine what type of entity is best for you. There are several types to choose from, including a sole proprietorship, LLC, partnership and more. This will determine your tax eligibility, and will also help you establish the processes for how your business will operate.

Make sure you do your research and consider the advantages and disadvantages of each type of business entity before you make a decision.

3. Open a business account

This one seems simple, but you’ll want to make sure you do your research and find the best place to set up a business account and/or a trust account, whether it’s with a credit union, a small community bank or a large national bank.

4. Get licensed and register with the NMLS

Next up, you’ll want to start the application for your licenses on the Nationwide Multistate Licensing System (NMLS) website. (Anyone who plans to originate mortgage loans needs to pass the NMLS exam to obtain a license.) Overall, the NMLS platform helps ensure you become a compliant and licensed mortgage broker, and validates your qualifications for potential clients and partners.

You can check out additional details on the NMLS here.

5. Set up loan origination tools

Having the right digital tools set up and ready to go is imperative to the success of your business.

You’ll want to look into things such as loan origination Software (LOS), which will be essential for originating and processing loan applications, as well as customer relationship management (CRM) software, which can help you stay in touch with your past clients and referral partners. It’s also important to have point-of-sale (POS) software to help automate loan applications and speed up parts of the mortgage process for your clients. You can learn more about each of these tools here.

6. Sign up with mortgage lenders

One of the biggest advantages of being an independent mortgage broker is the freedom to shop around with multiple lenders to ensure you get the best loan for your client’s needs. A general rule of thumb is to find at least three lenders to work with who can collectively handle the types of loans you might be focusing on – or that your clients might need down the road (e.g., VA, FHA, new construction, etc.).

Some other important things you’ll want to consider when choosing lenders to work with: What technology do they offer? How’s their service and speed? Do they offer a wide variety of loan products?

The wholesale mortgage industry is an incredible space to be in, and the fact that you’ve decided to take the leap to open your own brokerage is something to be proud of. Take a deep breath, and get ready for the adventure of a lifetime!

Are you ready to become an independent mortgage broker? Our team at BeAMortgageBroker.com will customize a step-by-step plan to help guide you through the process.