is it worth to become a mortgage broker?

Hi Tom, further to what Jamie said, keep in mind that if you will be opting to do broking part-time in addition to your current job for a while, you'll need to be aware you'll be using all your spare evenings and weekends either at your desk writing loans, or out visiting clients.  It would be a good idea to be very honest with yourself about how long you think you can dedicate to this lifestyle (having very little time for rest or social activities).  It would be a shame for you to put in a lot of hours and effort but only get half-way there before burning yourself out.

Carrying on from what has been said in the previous posts there are a couple of things you need to bear in mind:

1) You cannot get direct accreditation with lenders so will need to use an aggregator. With limited or no experience you will not be able to join certain aggregators i.e Fast (who i am with), Plan or Choice. Those aggregators who may take you on may want to take upto 20% of your commission.

2) Compliance. Maintaining your license these days requires ongoing compliance which takes time / money. Doing it part time will mean you will struggle to maintain your compliance requirements.

3) A Cert 4 + Diploma is merely one element of becoming a Broker. You will have to join an external dispute resolution organisation take our PI cover etc etc.

4) Reducing commissions. Many major lenders have ceased paying trail commission in Year 1 so you might find that you are spending a while building your business with limited return. You also want to make sure that your contract with your aggregator states you own the trail book. Many aggregators have a clause in their contract that they own your clients and not you so if you leave the industry or change aggregators your trail commission states with them.

5) Clawback. Can't be too many industries that what you get paid today can be clawed back upto 18 months later if the client sells the property or refinances / pays down the loan thru no fault of your own. Makes building a business very difficult in the early years.

Cheers

Yours in Finance

Not so easy as jamie

Most comments above are from brokers, read between the lines. Mortgage Broking is a great job and is financially rewarding. I was a school teacher and moved into the industry many years ago after the lowering of commissions etc. At the time I was also told all the negative reasons why I should not, and could not….I like yourself was well experienced with property investments and in fact had secured my financial future due to property investing. Given money was never to be an issue I took the time and effort to establish a business. Today, I have over five staff in my office and have just started to look for a second office and although I do not have a huge income, the service I provide is rewarding on so many levels. The new friends via staff and clients that I have now have, have complimented what was otherwise an already great life. Yes, my business is now a major part of my life outside of my family and my odd triathlon. But when you enjoy what you are doing, getting up and providing this service becomes a very easy job. In fact I should not be calling it a job as it is a lifestyle… From a financial perspective, allow some time, but ultimately you will survive if your core values are focusing on your clients needs versus a typical business that will focus on their own profits. I am happy to help you get into the industry. Good luck!  www.birchcorp.com.au

Hi Tom,

Mortgage broking can be a very fulfilling and rewarding career, especially if you enjoy helping other people.  The difficulty in the beginning, like any new business, is establishing your client base. 

In regards to you wanting to leave your current job, it comes down to how unhappy you are in your current position.   If you are happy enough to continue in your existing job, I would recommend to obtain your Diploma in Finance (Mortgage Broking Management) part time while still working.  The training organisation I completed my Diploma with was AAMC Training.  If you need to leave your job, you need to have a partner that is prepared to support you, or enough savings to live off for at least 12 to 18 months.

Once you have completed your Diploma, you will then need to find an existing broker who will act as your mentor, and will also allow you to operate as a credit representative underneath their Australian Credit Licence.    Depending on your agreement, some will ask for a flat monthly fee, and others will ask for a percentage of your commission.  When I started, I opted for the second option, as you are not paying out money until you start writing loans, and your mentor will not get paid unless you write loans.   It is important that you ensure any ongoing trail commission remains on your own individual loan book, as in the future this additional income is valuable if you decide to sell your business in future or in retirement.

The feedback I get from many brokers that have entered the industry in the last 5 years (myself included) is that it takes a good 2 years of hard work, and building relationships with financial planners, accountants, real estate agents and property developers before you start seeing the financial rewards, so it is definitely a marathon and not a sprint.  By all accounts, once you have an established client base, and you enjoy what you do, the business will continue to grow from referrals of your existing clients.

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Good luck.