Irv from New York asks: I have been studying the mortgage business for some time now, as I intend to make a career change in the near future. I am excited by the idea of helping people to purchase or refinance their homes while making a decent living for myself. I would be more interested in running my own loan business than I would be in working for someone else. One of my major concerns is how to become qualified with lenders so that I can sell their products. Do you have any advice in this regard? Thank you very much.
Dave: I get the question about starting a mortgage company “right off the bat” quite often. Even if you were able to get a broker’s license in your state (not likely), I HIGHLY recommend that someone new to the industry does not start their own residential loan business without experience.
This is a complex industry which includes complex regulatory concerns. Unfortunately, most do not find out how complex until it is too late.
I don’t know what you are doing now or have done in the past–but would you open up a CPA firm without 4 years of schooling and/or the appropriate experience? Of course, I am rendering this opinion without more information that I should require from you.
Was your last job selling computers, or do you now own a financial planning firm that is looking to “add” residential loans to their product line? Just because I say that it is a bad idea for the “typical” entry—does not mean that some will not succeed—and those who do typically will have a very strong background in financial services and/or real estate.
You need a mentor (does not have to be a boss) to help you understand the day-to-day of what to do in order to succeed (and stay out of trouble). This mentor would help with everything from reviewing your files, to helping you with scenarios, to directing your marketing/sales efforts to directing your continuing education plan. And do not think that the lenders will become your mentor–it is not their job–and many of them are not trained to serve as such anyway. Just the fact that you will be forced to search for lenders who will approve you without experience is a major recipe for disaster.
Get the right education, including working for the right company and then open your own business. Don’t get me wrong, even if you are working for a large company, I believe you are still “in business” for yourself. Those who think that they have a job in the industry typically do not succeed. It is only those who understand that they are building a business from day one and must invest the time, energy and money to build that business. Businesses that are underfunded do not succeed. You must invest in technology, marketing, education and more. Good luck.
Dave Hershman is Senior VP of Sales of Weichert Financial and the top author in the mortgage industry. Dave has published seven books, as well as hundreds of articles and is the founder of the OriginationPro Marketing System and Mortgage School – the online choice for expert mortgage learning and marketing content. His site is www.OriginationPro.com and he can be reached at firstname.lastname@example.org.