Whether you are switching careers or deciding on your very first career, becoming a licensed mortgage broker can be a fantastic, rewarding choice.
Let me begin by defining a mortgage broker’s role, because over the years it has evolved. A mortgage broker (or a mortgage agent or broker in Ontario, broker or sub-broker in British Columbia or mortgage associate in Alberta) is a conduit between a lender and a borrower. A broker may also arrange a private mortgage for a borrower, or a syndicated mortgage, depending on the regulatory requirements in the jurisdiction in which the broker is licensed.
In other words, a mortgage broker can arrange financing for a borrower as well as mortgage investments for investors. In being able to do both a broker can assist a consumer in two of life’s major goals; investing in a home and investing for retirement or wealth creation.
Many don’t consider a career as a mortgage broker simply because they don’t fully comprehend the incredible breadth of opportunity that a career as a mortgage broker can offer. In Ontario, becoming a mortgage broker/agent is one of the least expensive career routes that you can take, while offering you virtually unlimited income potential. Scroll down to see the costs of becoming a mortgage broker in Ontario.
What does it take to become a mortgage broker/agent?
In Ontario, to become a licensed mortgage broker/agent you must:
- Pass the mortgage agent course – click here for information on the course
- Get hired by a licensed mortgage brokerage – click here for information on getting hired
- Get licensed by the regulator, the Financial Services Commission of Ontario (FSCO)
The Real Estate and Mortgage Institute of Canada Inc. (REMIC) is a certified educational institution by Human Resources and Skills Development Canada (HRSDC). As such REMIC’s courses are tax free.
In addition REMIC offers a free job placement assistance program designed to assist graduates in obtaining employment with a licensed mortgage brokerage in Ontario.
REMIC is the leading provider of the mortgage course in Ontario, with over 44% of the province’s newly licensed agents having passed the REMIC course (according to FSCO).
Mortgage brokering in Ontario is regulated by the Financial Services Commission of Ontario (FSCO) and requires a license. To obtain a license you must first pass an accredited course. The Real Estate and Mortgage Institute of Canada Inc. (REMIC) is accredited by FSCO to provide the course. For more information please visit us at www.remic.ca/getlicensed or call us at 877-447-3642.
The answer to this question is both simple and complex. First, most brokerages’ compensation is commission based, similar to how real estate agents are paid. While there are a few brokerages that pay a salary, the vast majority are commission based. This is not a bad thing. The income potential on commission is far superior to that of a salaried employee.
To be successful requires at least the following:
- Ethics – strong ethics in any financial services industry is a must; they will ensure that you have a long career and the respect of your peers
- The ability to network – you must learn how to meet new potential clients and referral sources
- A flexible schedule – you must be able to take appointments when your clients are available, not just when you are
- Determination – it’s not always easy, but it’s almost always worthwhile. Stay determined to succeed
- Knowledge – learning the basics is the first step; ongoing training and upgrading of your skills on an annual basis is necessary to stay on top of product innovations and new trends
- Financial stability – because this is a commissioned position you will need the financial ability to go without any commission for the first few months. You’ll need that long to get clients and get paid. Some successful brokers have begun their careers working part-time, although that greatly increases the difficulty of becoming successful.
- An open mind – success in any field requires a person to be open to new ideas and new ways of doing business. This is no different. For example, doctors need mortgage brokers just as much as those who can’t get approved through their bank. So do lawyers. Wealthy investors looking for higher rates of return can be you client. While an overused cliché, the phrase “think outside of the box” is still a good one.
- A plan – a university graduate came straight into this field from school. Why was he successful in his first year? He created a business plan and followed it. Creating a good business plan is all about research. Know your market, know your competition, your strengths and weaknesses and make a plan that takes all of those variables into account. Then follow that plan. A well laid out plan can be the difference between success and failure.
- Follow up – Not everyone makes a decision the moment you speak with them. A potential client may not decide to buy that house or refinance their mortgage when they first speak to you. Ensure that you have a plan to follow up with all of those “warm leads” as the days and months go by and you’ll convert a fair number of them into commission generating clients.
- Embrace the internet – your website can be more than just a static page, it can be a great lead generator if done properly. Spend the time to research how to use your website to generate new leads for your business and you’ll be far ahead of your competition. If you don’t think you’re capable, research paying someone to do it for you. But don’t pay too much! You can spend a few hundred dollars to get the same results that you would by spending a few thousand on your website. Manage your money wisely.
What are the costs involved in becoming a licensed mortgage broker/agent in Ontario?
To begin your journey in your new mortgage career you will need to take the mortgage course. REMIC’s course, considered by many to be the best in the industry, is also the least expensive ranging from $298 to $345. This cost includes the textbook, online access with interactive exercises, video tutorials and exam guides, as well as one free exam rewrite, if necessary.
Once you’ve passed the course you will need to be hired by a brokerage. You will be required to pay errors and omissions insurance, which may cost you approximately $300 to $400 dollars. You may also be required to join a trade association, although this is not a requirement to being licensed.
You will then have to pay for your license to FSCO. Here is a breakdown of the costs to FSCO to begin your mortgage career:
Licenses come up for renewal every two years, with the next renewal on March 31, 2016 (the last one was March 31, 2014). The fee is calculated like this: $100 + (# of months to March 31, 2016 x $30).
For example, if you applied for a license on December 1, 2014 then you would pay an application fee of $100 plus (16 months to March 1, 2016 x $30) = $100 + $480 = $580
In total your new career should cost you approximately $1,500 to get started. Your income potential is unlimited, making this a great investment.
In conclusion, a career as a mortgage broker can be as rewarding as any high-end career that you may be contemplating, if you have the right attitude. That can be said about any career, but not all careers come with all of the benefits that this one does. It’s not for everyone, but if it is for you I hope this article will help you to make an informed decision.