How To Become A Mortgage Broker In Australia?

Are you considering a career as a mortgage broker in Australia? Perhaps the occupation has caught your curiosity, but you need help determining where to begin.

If you have a flair for numbers, can develop strong relationships with individuals, and get motivated by working towards a target, a career in mortgage broking is the best option for you.

Professionals who can genuinely impact their clients are usually in high demand. So if you're that person, mortgage broking can offer you a rewarding and fulfilling career.

But how can you go from having no experience to becoming a professional mortgage broker?

This blog entails everything about becoming a licensed mortgage broker in Australia, the steps, what they do, qualification requirements, courses, and salary to start a successful career.

1. What Does A Mortgage Broker Do?

A Mortgage Broker is a licensed and trained financial adviser who acts as an intermediary between potential lenders and people seeking a home loan.

The brokers use their resources, extensive network, and industry knowledge to connect loan seekers with lenders who best meet their requirements.

The individual signing the mortgage pays a commission to the mortgage broker, and the lending bank also pays a fee to them. The broker assists the bank in communicating with the borrower throughout the mortgage process. He also ensures that a quick decision is made and the signing process initiates immediately.

The broker mainly gathers all the information about the potential homeowner's expectations, income, and affordable payment criteria. Furthermore, before presenting the loan application to a lender, the broker investigates the borrower's credit history and may offer advice on improving one's credit score.

Then, a mortgage broker looks for the available mortgage programmes and portfolios of lenders to find the best match for the borrower's requirements.

After the broker has identified possible matches, they assist the prospective borrower in gathering the required documents to be submitted to the lender. Overall, they function as a stand-in for the loan seeker during the entire procedure. The broker frequently stays in touch with the borrower until the loan is finalised and closed.

To work as a mortgage broker, you must be licenced and certified by their local jurisdictions. Additionally, several businesses looking to recruit mortgage brokers prefer someone with a qualification like an associate's or bachelor's degree. 

Apart from that, they work in an office during regular business hours. Still, they may have to be available to attend after-hours phone calls and reply to emails from borrowers taking their services.

2. Major Duties and Tasks of a Mortgage Broker

• Mediate between the lending institution and the prospective homebuyer to structure and underwrite financial solutions.

• Interview clients and document their income, credit, and financial history.

• Gather paperwork to pre-approve clients and apply for loans on behalf of the borrower.

• Work with various lenders and assess the local mortgage market to find the best deals for clients.

• Deploy sales and marketing strategies to attract new clients.

• During the approval process, keep in touch with the lender and the client.

• Work to ensure that the consumer's jurisdiction's finance and banking regulations are followed.

• Educate clients on default consequences and define repayment terms for them.

• Explain to the borrower the legal elements of the loan and the payment terms and conditions.

Note: Most mortgage brokers work for professional mortgage broking firms in Australia, and a significant part of their job entails researching the options, features, alternatives, fees, and charges of numerous loans to identify the best match for their customers.

3. Steps To Become A Mortgage Broker in Australia

Here are some common steps you can follow to become a successful mortgage broker in Australia:

Step 1: Understand The Role of a Mortgage Broker

As mortgage brokers, we all know that a part of your job entails assisting clients in getting the best loan package for their specific needs. However, do you know how this occurs? What does a broker's typical day involve? 

Conducting thorough research is the first step towards becoming a mortgage broker in Australia. Listen to podcasts or read some online articles - plenty of mortgage broker content is available online.

It is also a good idea to contact a local mortgage broker and ask for any recommendations they may have.

Step 2: Know The Education Requirements

You first need to become a representative of a credit licence holder to be a mortgage broker. For the first two years of your employment, you will work as a representative for a licence holder. After that, you may choose whether to obtain your credit licence or continue as a representative.

Individuals who wish to apply for a broker license in Australia must meet minimum education requirements set by the regulator ASIC (Australian Securities and Investments Commission). 

Certificate IV in Finance and Mortgage Broking is the minimum and the most vital education requirement to work as a broker in Australia. Various educational institutions in Australia offer this course, so do your homework and select an accredited and reputable provider.

You can also undertake a Diploma of Finance and Mortgage Broking Management if you want to continue your education after completing the Certificate IV course. Furthermore, this course will improve your employment prospects and provide you with a better understanding of the processes. 

It is also an excellent alternative for individuals wishing to keep their options open and advance to a senior position sooner.

Step 3: Obtain Your License

After you complete your education, you are nearly ready to set up your own business or find a job. However, getting the appropriate professional accreditations in the sector would be best. 

You must obtain an ACL (Australian Credit License) from the ASIC (Australian Securities and Investments Commission). If there are no unexpected delays, ASIC will provide you with your new broker license in Australia within 28 days. You will be legally authorised to begin working.

Step 4: Join A Professional Organisation And Find an Aggregator

Once you receive your licence, you must join a professional and recognised mortgage broking organisation to receive mentoring through a practising mortgage broker.

Your mentor will assist you during the first two years of your profession and function as an aggregator, connecting you with several lenders.

The two professional organisations that you can join include FBAA (Finance Brokers Association of Australia) and MFAA (Mortgage and Finance Association of Australia). 

Each association offers different services, so conduct your research correctly. Before making the final decision, gather information from other brokers.

Step 5: Prepare Your Resume

You will find hundreds of broker positions advertised throughout Australia. You can apply for these jobs via reliable networking platforms. Additionally, it is essential to note that the number of mortgage broker jobs in Australia will rise in the coming years, per government projections.

You will need to show your enthusiasm and expertise for the role in your cover letter if you want your application to stand out. It is also beneficial to obtain recommendations from trainers who have assisted you in reaching your educational goals.

4. What Skills Do You Require To Become A Mortgage Broker In Australia?

You must possess skills to become a qualified mortgage broker in Australia. 

Below are some fundamental skills you require that will set you apart from other brokers in the industry.

• Practical Negotiation Skills: When securing the best deal for your client, you should be prepared to go to great lengths. A lot of negotiating is involved and providing a solution that will benefit them in the long run.

• Excellent Communication Skills: Mortgage brokers analyse and assess their clients' financial situations before matching them with the appropriate offer by one of the banking institutions on their list. Therefore, you require excellent communication skills to explain in simple words to your clients the options available and assist them in making the right decision.

• Passion for Helping Others: Genuinely caring for your clients is not a talent that comes naturally to everyone, but it is something that one should cultivate. A competent broker would chase approvals for his customers rather than just completing the loan application. You should keep track of the loan's progress from when it's applied to when it is paid off while keeping your client informed.

• You should strive to make things as simple as possible for your clients and be ready to answer any questions they may have. A good reputation is a broker's most important asset, and developing a solid connection with clients provides a solid foundation for it. Being passionate about helping others will help you attract new clients and retain existing ones who may want your services.

• Good Methodological and Analytical Skills: When finding options for their clients, brokers must have a certain amount of determination. Mortgage brokers must be diligent workers with excellent research skills. They analyse their client's financing capacity and calculate their application fees, stamp duty costs, and deposit amounts. They must dive deep and work hard to find the best solution for their customers.

5. What Are The Mortgage Broker License Requirements?

The mortgage broking businesses industry in Australia requires brokers to fulfil licensing requirements via the ASIC (Australian Securities and Investments Commission).

A highly regulated industry can be beneficial for maintaining mortgage broking standards for your clients and your business. However, it may set some obligations for a small enterprise. 

Hence, joining a company already licenced and enabling you to operate your business within its scope is a great alternative.

6. How Much Does A Mortgage Broker Earn in Australia?

According to Payscale, the average entry-level mortgage broker salary in Australia for individuals with less than one year of experience is around AU$52,150, based on 12 salaries. 

This also includes bonuses, tips, and overtime pay. Based on 99 salaries, an early career mortgage broker with one to four years of experience makes an average salary of around AU$58,850.

On the other hand, a mid-career mortgage broker with five to nine years of experience earns around AU$64,200, based on 41 salaries. Additionally, based on 31 salaries, an experienced mortgage broker with ten to nineteen years of experience makes an average income of around AU$72,607.

Lastly, employees in their late careers with more than 20 years of experience receive an average total remuneration of around AU$75,000.

Now that you have learned how to become a mortgage broker in Australia, you are ready to discover this exciting career and build the life you desire.

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