How to Get a Mortgage Broker License

Published: Nov 15, 2021
how to get a mortgage broker license

Your Guide to Getting a Mortgage Broker License in 2022

 

  • What is a Mortgage Broker License?
  • How do I Get a Mortgage Broker License?
  • What Are the General Mortgage License Requirements? 
  • What Are the Mortgage Broker License Requirement in My State?
  • What Are the Steps to Getting Mortgage Broker License?
  • How Long Does It Take to Get a Mortgage Broker License?
  • How Much Does It Cost to Get a Mortgage Broker License?

 

What is a Mortgage Broker License?

Mortgage brokers act as an intermediary between lenders and potential homebuyers who wish to access mortgage lending. They often work in tandem with mortgage loan originators and mortgage loan officers, however, mortgage brokers sometimes also fulfil these roles to offer customers a complete service. 

The purpose of the licensing procedure is to ensure that mortgage brokers meet federal law and state requirements for operating as a broker. The criteria are rigorous and aim to guarantee the high standards of operation in the industry. 

In many states, you need to undergo the process through the website of the Nationwide Multistate Licensing System and Registry (NMLS). Alternatively, the state body that oversees financial activities would handle the licensing. 

In order to launch your mortgage brokering business smoothly, we’ve prepared a step-by-step guide that will take you through the main tasks that you have to complete to get licensed. 

How do I Get a Mortgage Broker License?

There are a number of requirements to gaining a mortgage broker license, however, these requirements may change slightly depending on which state you wish to practice in. The main points to consider include: 

  1. Pre-licensing mortgage broker course and qualification
  2. National Mortgage License System (NMLS) test and qualification
  3. Mortgage brokerage registration 
  4. Mortgage broker license and surety bond 

Once you have fulfilled these requirements and received your mortgage broker license, you can begin to build relationships with mortgage lenders and other lending institutions, and then offer your services to potential borrowers. However, it is also important to remember ongoing training and testing to maintain your mortgage broker license may be a pre-requisite of continued practice, so it is crucial that you inform yourself as to what is required in your state. 

What Are the General Mortgage License Requirements? 

Below you can find the most common steps to become a mortgage broker with a state license. There are differences between licenses for companies and for independent mortgage brokers acting as individuals. 

Business Documents

All applicants must register a business entity in the state in which they wish to run their business. You may also have to get a trade name in case you want to operate under an assumed name. 

If you are planning to hire employees, you need to obtain an Employer Identification Number (EIN) from the IRS.

The rest of the documents that you’re likely to need for your state licensing include:

  • Information about the owner and applicant
  • Business plan
  • Organizational chart
  • Management chart
  • Resident/Registered Agent information
  • Primary/non-primary contact employee information
  • Disclosure questions
  • Policies and procedures
  • Certificate of Authority/Good Standing Certificate

Post a Mortgage Broker Bond

One of the main requirements that you need to fulfil to get a mortgage broker license is to post a surety bond. It is a safety instrument that protects the state in which you operate and you customers against potential illegal actions you may undertake. Thus, it guarantees your compliance with applicable laws.

The bond amount of your mortgage broker bond is set by your state authorities. It may be a fixed amount or may depend on your volume of brokering business. 

To get bonded, you must cover a premium, which is a small percentage of the required amount. It depends on the strength of your personal and business finances. If they are in good shape, the rates you may get are between 0.5% and 5%

Want to see the exact cost of your mortgage broker bond? Fill in the short form below! 

Criminal Background Check

In most cases, you must authorize an FBI criminal background check. Some states may also require you to pass a state criminal background check.

Financial Statements and Credit Reports

Typically, you need to showcase your audited financial statements. In some cases, you need to demonstrate with them that you meet the minimum net worth requirements

Persons in a position of control usually must authorize a credit score check. 

Education and State Exams 

For some license types, you must pass pre-licensure mortgage broker education courses, which often consist of 20 hours. Then you need to complete a state mortgage broker test

To prepare for the exam, you can use the services of mortgage broker schools. They can also be of help in meeting the mortgage broker continuing education requirements when renewing your license. 

 

What are the Mortgage Broker License Requirement in My State?

The first step that you must take is to get acquainted with the mortgage broker qualifications that your state requires from professionals like you. You can find this information via the Nationwide Multistate Licensing System and Registry (NMLS website), or through the website of your state licensing body. 

Don’t miss also our extensive guide and infographic on how to become a mortgage broker.

Choose your state from the list below to check out the specific mortgage broker licensing requirements there:

Mortgage Broker Licensing Requirements per State

How Long Does It Take to Get a Mortgage Broker License?

As a rule, you can expect your mortgage broker license application to take between 10 and 16 weeks from start to finish. This estimate includes the time it takes you to gather the relevant documentation for your application, and the time it takes to process your application. 

Obviously, the quicker you can deliver the required documentation, the quicker your application can be processed. Additionally, it is extremely important to ensure you application is complete upon delivery to the state since incomplete applications will require intervention and will significantly delay the process. 

How Much Does It Cost to Get a Mortgage Broker License? 

The cost of your mortgage broker license will vary from state to state, and you should always check the specific costs in your area. However, you can usually expect an application fee of around $300 – $500 to register your business, and the NMLS processing fee of $1500. Additionally, the 

In addition to these costs, you can expect to pay varying amounts for credit reports and criminal background checks, as well as other fees unique to your specific state. It is also worth noting that some states require a minimum net worth in order for you to apply for a MBL. 

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John Williams

John Williams

John Williams is currently the Director of Sales for Lance Surety. Since joining the company in 2011, he has served in various roles throughout the organization, working his way up to now managing our team of licensed agents. As a licensed property & casualty agent, John has become extremely knowledgeable in all facets of the surety industry, including commercial, court and contract bonds. Under his leadership, John’s team has helped thousands of businesses throughout the country meet their license and bonding requirements.