America’s mortgage debt stands at about $9.4 trillion, a record-high.
It’s clear the vast majority of homeowners in the United States have a mortgage. And with home prices rising, taking out a mortgage will continue to be the only way for prospective homeowners to buy a home.
If you’re looking to start a mortgage business, this is good news. There’s sufficient demand in the market.
However, there are so many players, making the industry super competitive. How do you stand out?
In this article, we’re sharing keys for how to start a mortgage company that can succeed.
1. You Need to Be a Mortgage Specialist
A mortgage company is only as good as the mortgage brokers behind it.
This isn’t the type of business you can start even when you don’t have any kind of relevant experience or training. A mortgage brokerage can only be started by a licensed mortgage broker.
A mortgage broker is a professional who has met all the necessary state-specific licensing requirements. All states require aspiring brokers to secure licensing through the Nationwide Multistate Licensing System and Registry.
As such, if you already aren’t a licensed mortgage broker, the first step would be to undergo the necessary training. You should then find a job in an established brokerage where you can gain experience and learn more about the mortgage industry.
2. Secure Adequate Startup Capital
When you’re ready to start your own mortgage brokerage, don’t rush to open up without having adequate capital.
This is a common mistake among brokers who’re starting their own businesses. Armed with sufficient experience and industry connections, they believe that they already have most of what it takes to start and run a successful mortgage company.
Well, as much as experience and industry connections are important, you need adequate startup capital. Drawing a business plan is a good way to estimate your startup and working capital needs. This way, you won’t crush out if your business takes longer than expected to pull in enough revenues.
3. Choose Your Location Wisely
You’ll start your brokerage in the state where you’re licensed to practice. However, this doesn’t mean you should set up your office anywhere in the state.
Choose a strategic location. Ideally, you want a place where there’s a high concentration of potential homeowners, but with a few mortgage brokerages. This will give your new business the best chance of securing clients without facing too much competition.
4. Leverage Industry Technology
Of course, your office will have the latest computers and other pieces of essential tech, but that’s not all you need. For your mortgage company to succeed, you need to leverage the power of industry tech. For instance, you need software that handles your mortgage origination process.
In addition to investing in technology, design and implement a suitable marketing strategy. Or you could outsource your marketing to a marketing agency.
How to Start a Mortgage Company That Will Thrive
The mortgage industry is massive, but competition for clients is fierce. However, this shouldn’t discourage you from starting a business. With this guide on how to start a mortgage company, you’re in a better position to establish a brokerage that will succeed.
Keep reading our blog for more business tips and advice.