Mortgage broking is a dynamic and rewarding career path, offering individuals the opportunity to help people achieve their dreams of homeownership and/or building a property investment portfolio. If you're interested in becoming a mortgage broker in Australia, there are a few steps you'll need to take to get started.
In this article, we'll outline the key steps to becoming a mortgage broker.
Step 1: Meet the Educational Requirements
The first step to becoming a mortgage broker in Australia is to ensure that you meet the entry level and educational requirements. This includes:
Completing a Certificate IV in Finance and Mortgage Broking
Passing an Anti Money Laundering (AML) exam (provided by your industry body)
Completing a Compliance Training program (set by your industry body)
Step 2: Select an Aggregator that’s right for you
There are many different types of aggregators all of which are designed to give you access to lenders to write deals through. BUT not all aggregators offer the same level of support and commission structures. Some offer 100% commissions but have high monthly fees, some offer low monthly fees, lots of support and take a small commission split on the loans you write.
Here at Lendd Group we are partnered with AFG who are Australia’s largest aggregator and offers a high level of support and training.
Top Tip: Don’t concentrate on the commission structure but instead the support and personal cash flow capabilities of yourself. It’s not uncommon for a new broker to wait 6 months before receiving their first commission payment! Could you get a loan approved and survive paying $2k a month plus business and marketing costs for 6 months with no income or support?
Step 3: Join an External Dispute Resolution Scheme - AFCA
ASIC requires all representatives to become a member of an ombudsman approved to deal with credit matters. The Australian Financial Complaints Authority (AFCA) is the external dispute resolution scheme approved for financial products or services. Details of the membership fees can be found on their website, afca.org.au.
Step 4: Join a Professional Association (MFAA or FBAA)
All Independent mortgage brokers have to join a professional association, such as the Mortgage and Finance Association of Australia (MFAA) or the Finance Brokers Association of Australia (FBAA). These organisations lobby in the best interests of the broking industry. They also dictate a broker code of conduct we have to obey and ensure we are staying up to date with changes in the industry and market through obtaining a minimum of 20/30 hours worth of training per year. They are also a good resource for education and events.
Step 5: Chose a Mentor
For your first 2 years as a mortgage broker you have to be mentored by an experienced broker who has at least 4 years of experience (as set by the MFAA/FBAA). A mentor will help guide you with on the job training on how to deal with a client, process a loan, deal with lenders and run a broking business.
There are many different forms of mentors and mentoring programs out there but not all are created equal.
Top Tip: When choosing a Mentor are you getting access to a full mentoring program or just someone to point you in the right when you call? Do they have the time to dedicate to you? Are they helping you with clients only or are they providing business support and coaching as well? The average mentoring fee is around $500 per month for 24 months and choosing the right mentor can make or break your mortgage career.
Here at Lendd Group we offer a full 24 month mentoring program including business coaching, 1:1 sessions and monthly training programs and webinars. Our mentoring fees are also covered under a commission split agreement designed to keep your monthly overheads low.
Step 6: Obtain an Australian Credit License or become an Authorised Credit Representative
To operate as a mortgage broker in Australia, you'll need to obtain an Australian Credit License (ACL). This involves submitting an application to the Australian Securities and Investments Commission (ASIC) and meeting the necessary criteria, which includes completing the required training and having the necessary financial resources to operate a credit business.
Alternatively, you can choose to work under an established credit licensee such as Lendd Group and AFG as an Authorised Credit Representative (ACR), which means you can operate as a mortgage broker under their license. This can be a good option for new brokers who may not have the resources to obtain their own credit license.
Step 7: Obtain Professional Indemnity Insurance (PI)
In order to obtain your ACL or ACR you will need to obtain PI insurance to cover you should any clients make a complaint against you. Depending on the group or aggregation company you join they may add you to their current policy.
Step 8: Develop Your Skills
As a mortgage broker, you'll need a range of skills, including sales and marketing, financial analysis, and communication skills. Continuing education and professional development can help you stay up-to-date with industry trends and improve your skills.
Conclusion
Becoming a mortgage broker can be a rewarding and fulfilling career path, but it requires dedication, hard work, and the right skills and qualifications. By following these key steps, you can set yourself on the path to success as a mortgage broker, helping people achieve their dreams of homeownership and property investment goals.
Don’t underestimate the time it takes to get everything done, from completing your Cert 4 to obtaining your broking license and becoming accredited with a bank can take around 2 months.
If you would like to find out more about joining Lendd Group and our Mentoring Program contact us today for more information.
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