A mortgage broker, or a mortgage credit intermediary, is a natural or legal person who is not acting as a creditor or notary and not merely introducing, either directly or indirectly, a consumer to a creditor or credit intermediary and who, in the course of his trade, business or profession, presents or offers credit agreements to consumers; assists consumers by undertaking preparatory work or other pre-contractual administration in respect of credit agreements other than as referred to in point; or concludes credit agreements with consumers on behalf of the creditor.
Mortgage brokers handle clients’ mortgage applications, collect loan documentation and search for new mortgage lending opportunities. They complete and close mortgage loan processes for their clients.
The duties of a mortgage broker typically include, but are not limited to:
- Establishing professional relationships with mortgage lenders to recommend them to clients
- Gathering documents, credit history and employment verification for prospective homebuyers
- Applying for mortgage loans with established lenders on behalf of the borrower
- Comparing lender fees such as interest rates and closing costs to present options to the borrower
- Advising clients on their options and clearly explaining the legal and repayment details of any available loan
- Ensuring loans are compliant with all relevant regulations and laws
- Completing all closing paperwork with the lender, title company, insurance broker and any other relevant agency
The following job titles also refer to mortgage broker:
officer for mortgage loan
administrator of mortgage loans
mortgage loans officer
Mortgage brokers work in a fast-paced environment where communication is constant. Some brokers work in an office space with fellow brokers, assistant and mortgage professionals, while others work by themselves in a remote location. Each mortgage broker may have a unique working environment, but here are some conditions they usually share:
- Meeting with clients in an office space
- Communicating with lenders via phone or email
- Generating new leads by networking with real estate agents, lenders, prospective home buyers and insurance brokers
- Organizing multiple mortgages and clients at once, with heavy reliance on computers and telephones to communicate
- Answering questions clearly and following up with the various phases of document requirements
- Reviewing details of legal documents to be able to convey their meaning clearly
- Repeating similar tasks
- Working occasional irregular hours, such as nights and weekends, to meet the needs of borrowers
Mortgage brokers need at least a high school diploma or equivalent. A mortgage broker can earn an associate’s or bachelor’s degree in business administration, finance, accounting, or a related field to expand their job opportunities and increase their earning potential.
In some locations, mortgage brokers may have to hold a license or a certificate.
ISCO skill level
ISCO skill level is defined as a function of the complexity and range of tasks and duties to be performed in an occupation. It is measured on a scale from 1 to 4, with 1 the lowest level and 4 the highest, by considering:
- the nature of the work performed in an occupation in relation to the characteristic tasks and duties
- the level of formal education required for competent performance of the tasks and duties involved and
- the amount of informal on-the-job training and/or previous experience in a related occupation required for competent performance of these tasks and duties.
Mortgage broker is a Skill level 3 occupation.
Mortgage broker career path
These occupations, although different, require a lot of knowledge and skills similar to mortgage broker.
Long term prospects
These occupations require some skills and knowledge of mortgage broker. They also require other skills and knowledge, but at a higher ISCO skill level, meaning these occupations are accessible from a position of mortgage broker with a significant experience and/or extensive training.
Essential knowledge and skills
This knowledge should be acquired through learning to fulfill the role of mortgage broker.
- Banking activities: The broad and continuously growing banking activities and financial products managed by banks ranging from personal banking, corporate banking, investment banking, private banking, up to insurance, foreign exchange trading, commodity trading, trading in equities, futures and options trading.
- Securities: The financial instruments traded in financial markets representing both the right of property over the owner and at the same time, the obligation of payment over the issuer. The aim of securities which is raising capital and hedging risk in financial markets.
- Mortgage loans: The financial system of acquiring money by property owners or prospective property owners, in which the loan is secured on the property itself so that the property can be repossessed by the lender in the absence of payments due by the borrower.
- Property law: The law and legislation that regulates all the different ways to handle property, such as the types of property, how to handle property disputes and property contract rules.
- Actuarial science: The rules of applying mathematical and statistical techniques to determine potential or existing risks in various industries, such as finance or insurance.
- Real estate underwriting: The process of evaluating applications for loans in real estate activities in which not only the prospective borrower but also the property being traded in is evaluated in order to assess whether the property will be capable of redeeming its value.
- Tax legislation: Tax legislation applicable to a specific area of specialisation, such as import tax, government tax, etc.
- Credit control processes: The various techniques and procedures applied to ensure that credit is given to the suitable customers and that they pay on time.
Essential skills and competences
These skills are necessary for the role of mortgage broker.
- Collect property financial information: Collect information concerning the previous transactions involving the property, such as the prices at which the property had been previously sold and the costs that went into renovations and repairs, in order to obtain a clear image of the property’s value.
- Maintain client debt records: preserve a list with the debt records of clients and update it regularly
- Interview bank loanees: Perform interviews with candidates requesting a bank loan for different purposes. Pose questions in order to test the goodwill and the financial means of candidates for paying back the loan.
- Decide on loan applications: Take into account the risk assessment and analysis and perform the final reviewing of the loan application in order to approve or deny the loan, and set in motion the necessary procedures following the decision.
- Moderate in negotiations: Oversee negotiations between two parties as a neutral witness to ensure that the negotiations occur in a friendly and productive manner, that a compromise is reached, and that everything is compliant with legal regulations.
- Examine mortgage loan documents: Examine documents from mortgage borrowers or from financial institutions, such as banks or credit unions, relating to a loan secured on a property in order to examine the payment history of the loan, the financial state of the bank or borrower, and other relevant information in order to assess the further course of action.
- Provide support in financial calculation: Provide colleagues, clients or other parties with financial support for complex files or calculations.
- Assess mortgage risk: Assess whether the borrowers of a mortgage loan are likely to pay back the loans in a timely manner, and whether the property fixed in the mortgage is able to redeem the value of the loan. Assess all the risks involved for the lending party, and whether it would be beneficial to grant the loan or not.
- Obtain financial information: Gather information on securities, market conditions, governmental regulations and the financial situation, goals and needs of clients or companies.
- Manage loan applications: Manage the application process for loans from the process of interviewing the applicant and reviewing the documentation, assessing the risks, and accepting or denying the loan and ensuring compliance with the underwriting process.
- Maintain credit history of clients: Create and maintain the credit history of clients with relevant transactions, supporting documents, and details of their financial activities. Keep these documents updated in case of analysis and disclosure.
- Monitor loan portfolio: Control the ongoing credit commitments in order to detect anomalies related to the schedules, refinancing, approval limits etc., and to identify improper disbursements.
- Negotiate loan agreements: Negotiate with banking professionals or other parties functioning as lenders in order to negotiate the interest rates and other aspects of the loan contract in order to obtain the most beneficial agreement for the borrower.
- Inform on interest rates: Inform prospective borrowers on the rate at which compensation fees for use of assets, such as borrowed money, is paid to the lender, and at which percentage of the loan the interest stands.
Optional knowledge and skills
This knowledge is sometimes, but not always, required for the role of mortgage broker. However, mastering this knowledge allows you to have more opportunities for career development.
- Foreclosure: The legal system surrounding the recovery of a loan or debt which a debtor or borrower has not completed the payments of and of which payments have been neglected by enforcing the sale of assets which were used as collateral for the loan.
- Debt systems: The processes needed to obtain goods or services before payment and when a sum of money is owed or overdue.
- Business loans: Loans which are intended for business purposes and which can either be secured or unsecured depending on whether a collatoral is involved. The different types of business loans such as bank loans, mezzanine finance, asset-based finance, and invoice finance.
Optional skills and competences
These skills and competences are sometimes, but not always, required for the role of mortgage broker. However, mastering these skills and competences allows you to have more opportunities for career development.
- Analyse loans: Examine and analyse the loans provided to organisations and individuals through different forms of credit such as overdraft protection, export packing credit, term loan, and purchase of commercial bills.
- Protect client interests: Protect the interests and needs of a client by taking necessary actions, and researching all possibilities, to ensure that the client obtains their favoured outcome.
- Assist in loan applications: Assist clients with filling out and managing their applications for loans by providing them with practical assistance, such as provision of relevant documentation and instruction on the process, and other advice such as any arguments they could bring forward to the lending organisation in order to secure the loan.
- Synthesise financial information: Collect, revise and put together financial information coming from different sources or departments in order to create a document with unified financial accounts or plans.
- Interpret financial statements: Read, understand, and interpret the key lines and indicators in financial statements. Extract the most important information from financial statements depending on the needs and integrate this information in the development of the department’s plans.
- Communicate with banking professionals: Communicate with professionals in the field of banking in order to obtain information on a specific financial case or project for personal or business purposes, or on behalf of a client.
- Examine credit ratings: Investigate and look for information on the creditworthiness of companies and corporations, provided by credit rating agencies in order to determine the likelihood of default by the debtor.
- Consult credit score: Analyse the credit files of an individual, such as credit reports which outlines a person’s credit history, in order to assess their creditworthiness and all the risks that would be involved in granting a person a loan.
- Analyse financial risk: Identify and analyse risks that could impact an organisation or individual financially, such as credit and market risks, and propose solutions to cover against those risks.
ISCO group and title
3311 – Securities and finance dealers and brokers
- Mortgage broker – ESCO
- Learn About Being A Mortgage Broker | Indeed.com
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