Beyond earning the credentials and licencing to become a mortgage broker, there are additional ways to find success and boost your earnings. One such way is to partner with a mortgage broker franchise.
Mortgage broker franchising works the same way that other more familiar franchising works. Take fast food, for example. Entrepreneurs and small-business owners buy into an established brand or company, like McDonald’s or Hungry Jack’s, and they work with the corporation to run individual stores. This provides the shop owners with name recognition, networking opportunities, and business support.
Mortgage broker franchising operates in a similar fashion. You partner with a mortgage broker franchise to gain industry insights, networking opportunities, and business set-up kits, among many other benefits. These mortgage brokering benefits allow you to identify potential new clients, satisfy your current clients’ needs, and retain these clients over the life of your career. On the other side, the franchise model also connects brokers with a network of lenders.
What does it take to get started with a mortgage broker franchise?
As noted, mortgage broker franchising works similarly to other types of franchising. This also holds true for breaking into the sector.
Brokers pay a one-time set-up fee to get started with a franchise model. Compared to other retail franchise options, the initial costs for a mortgage broker franchise is relatively low. The mortgage broker franchise will then typically provide different subscription options to maintain the professional relationship. Based on the broker business model you subscribe to, you might:
- Receive new leads from the brand.
- Benefit from local and/or national marketing.
- Work with ready-approved lenders.
- Gain access to a database of clients.
- Obtain specifically designed business kits.
Which options to incorporate will depend on your business needs, as well as your short- and long-term goals. Each individual mortgage broker will have varying immediate needs they’ll have to focus on.
Beyond the set-up fee and sliding-scale subscription models, there are usually no other hidden costs or fees needed to partner with a mortgage broker franchise.
Varying Commission Models
In addition to the different subscription offerings available from a mortgage broker franchise, they also provide varying types of commission packages.
In most instances, mortgage brokers earn their income through commissions based on the loan applications they process. Brokers receive a commission from the lender for loans they secure with them, and then also get a trailing commission for as long as the loans last.
While these are the two main types of commissions for most mortgage brokers, there are variations in how they’re paid out and in the percentage of the loan they comprise. These packages can range from brokers receiving around 80 to 90 per cent of their commission, but then paying less each month in the up front payments, to brokers receiving the full commission but making higher monthly payments.
Just like the business model subscription options, the commission package you’ll need will depend on your industry experience and current situation.
Why consider partnering with a mortgage broker franchise?
There are many benefits to partnering with a franchise mortgage broker group.
One of the best ones is that this model allows you to maintain the independence of running your own broker business. Even though you’ll be working under the umbrella of the mortgage broker franchise, you get you to choose how you operate, how you market and promote your company, and how you essentially make your own living.
You are still responsible for maintaining your own operating costs, such as your own office rent, associated utilities, and any administration fees. You can also opt to work from the comfort of your home, and forego many of these overhead costs. You will still need to ensure you have a dedicated phone line and Internet connection, as well as a spot to meet clients, but the cost savings are still great. Beyond this, the franchise helps out with other features you might not realise you need to forge relationships with clients and lenders, such as marketing materials and CRM.
Higher loan margins
Traditional mortgage brokers working without a franchise don’t have access to additional fee incomes. Franchises give brokers the opportunity to make higher loan margins to further boost their earnings.
In addition to running your own business, you also gain the added benefits of partnering with a mortgage broker franchise to help ease you into the industry while also gaining access to potential clients and new sources of income. It’s not a guaranteed shot straight to success, but it does greatly increase your odds of expanding your client portfolio, originating more loans, and ultimately earning more money in the long run.
At the end of the day, mortgage broking franchise groups are available to help both brokers just starting off or long-time industry veterans. Click here to learn more about how a mortgage broking franchise group can help you.