Have you been thinking about becoming a mortgage broker?
If you have, then you’re in the right place because we’re about to deep dive into mortgage broking and help readers decide whether it’s the job for them. So, stick around as we take you through the pros and cons of being a mortgage broker.
First up, is it worth becoming a mortgage broker? In order to make an informed decision about the effort you put in versus the income you earn, we’ll need to examine what being a mortgage broker, will mean for you.
What is a mortgage broker?
In a nutshell, a mortgage broker is the middle man between lenders and borrowers. Their role is to find suitable mortgage options, make recommendations and to manage the loan application process for borrowers.
There are thousands of mortgage products on offer from banks, building societies and other lending institutions. Each of those products have unique eligibility requirements and conditions.
Each potential borrower will be unique and have different requirements and goals to be met.
That said, this is where mortgage brokers come into the picture. After understanding the needs of the borrower, a mortgage broker will navigate through the products on offer and provide the borrower with options to choose from.
To do this mortgage brokers:
- study their clients’ financial needs and circumstances to work out how much they can safely borrow
- sift among the numerous mortgage products on the market to find those that match their clients’ financial circumstances
- explain loan costs and repayment conditions to ensure clients understand what purchasing a property will entail
- submit loan applications to lending institutions on behalf of their clients
- manage the process of obtaining finance through to settlement of the property.
For home buyers, the most appealing aspect of using a mortgage broker is that they don’t have to pay a cent for this essential service. Instead, mortgage brokers are paid a commission by the lending institution on each mortgage they successfully negotiate.
Do you still think a career in mortgage broking might be for you? Hold on because before you take the plunge, it’s important to inform yourself about all aspects of being a mortgage broker, pros and cons.
Once you understand both the positives and negatives of this dynamic profession, you’ll be in a position to answer the question: Is it worth becoming a mortgage broker in Australia?
The pros of being a mortgage broker
When it comes to considering being a mortgage broker, job security and opportunities for professional advancement ought to be factored in. A career in mortgage broking offers tremendous potential in both areas. It can also be a very lucrative profession.
There’s high demand for qualified mortgage brokers across the sector, including banks, credit unions, mortgage houses, and even private lenders. For example, during the October 2022 quarter, over 70% of all Australian home loans were secured by mortgage brokers for their clients. This translates into a broad suite of professional opportunities for mortgage brokers that extends the length and breadth of Australia.
Demand for mortgage brokers should remain strong even in the current era of rising interest rates. ANZ senior economist Adelaide Timbrell has predicted that Australia will see an increased demand for fixed-rate mortgages in the future.
Mortgage and Finance Association of Australia CEO Anja Pannek also predicted good news when she said that the looming wave of fixed-rate mortgages would provide “an opportunity for brokers in Australia to show their value”.
The cons of being a mortgage broker
In life, nothing is perfect. This means the mortgage broking industry has downsides as well. So, what are the cons of being a mortgage broker?
At times, mortgage broking can be intellectually demanding. You’ll be responsible for analysing financial documentation to ensure all legal requirements are met, and because governments often make amendments to financial laws and regulations, you’ll have to keep abreast of those changes.
As a mortgage broker you’ll be overseeing large financial transactions, which also requires a high level of responsibility. Those transactions can take place under tight deadlines, so you may sometimes work irregular hours to make sure the work is done on time.
So, the bottom line, is being a mortgage broker stressful? At times, it certainly can be. That means it’s a job that might not suit everybody.
Qualifications and skills needed to become a mortgage broker
So now that you’ve seen what’s involved in being a mortgage broker, pros and cons, let’s examine what it takes to join this lucrative career field.
Your first step is to complete a Certificate IV in Finance and Mortgage Broking (FNS40821) course. This course has no formal entry requirements and consists of 12 study units. Your Certificate IV qualification will enable you to work as a mortgage broker who provides assistance to clients seeking to finance a property purchase.
If you’d like to rise to a leadership role in mortgage finance, Entry Education also has you covered. The Diploma of Finance and Mortgage Broking Management (FNS50322) course will get you there. This course consists of 15 study units. If you’ve already earned your Certificate IV in Finance and Mortgage Broking, you’ll only have to complete another seven study units to qualify for your diploma.
Many financial institutions require their mortgage brokers to hold a Diploma of Finance and Mortgage Broking Management as a threshold requirement for employment. This Diploma can be the ticket to a supervisory role in property finance. It could help you to expand your client base and move into the commercial broking space.
Researching the market and having financial knowledge is key
Your goal as a mortgage broker is to guide your clients through the most significant financial decision they’re likely to ever make. The capacity to conduct comprehensive market research will be one of your primary tools towards that end. As a mortgage broker, you’ll have to keep abreast of changes to interest rates, trends in property values and general financial market conditions in order to provide your clients with the best service.
Understanding the various mortgage types on offer is critical
Identifying mortgage products that meet the specific financial needs of your clients is another vital skill. As a mortgage broker, you’ll explain the specific terms and conditions of each loan option so your clients can make informed choices. By helping your clients understand the advantages and disadvantages of fixed rate versus variable rate mortgages, teaser rates and collector loans, they’ll be able to make the most appropriate borrowing decisions.
Why Entry Education?
Because we measure our success by yours. At Entry Education we always make an extra effort to accommodate the needs of our students. Our easy-to-access student portal makes online study simple and you’ll always have access to extra help from our dedicated tutorial staff.
When you choose Entry Education for your Certificate IV in Finance and Mortgage Broking (FNS40821) or Diploma of Finance and Mortgage Broking Management (FNS50322), we guarantee that:
- there’ll be no extra charges, hidden costs or surprises
- our assessments consist predominantly of multiple-choice and short-answer questions
- we’ll return your marked assessments in three to five business days
- our training courses are compliant with legislative and regulatory requirements
- you’ll have access to the support of your own online tutor throughout your selected course.
So now that you’ve read about being a mortgage broker, pros and cons, you’ll have a clear idea of the job. If the prospect of a career in mortgage finance is appealing, reach out to our friendly team by email or telephone.
We love real estate and are happy to help you land a job in the industry.