Mortgage Broker Business Plan: Tips To Create One

Picture of Elizabeth Galan
Elizabeth Galan

If you’re interested in a successful career as a mortgage broker, then you need to do your due diligence. For starters, you need a business plan. While this may seem like unnecessary work, it will definitely come in handy and help guide you down the road. 

Why Become a Mortgage Broker?

Before creating a mortgage broker business plan, you need to be totally sold on the industry if you aren’t already. Becoming a mortgage broker is a legitimate business venture that requires investments in terms of time and money in order to be successful. But with the right amount of work, you can have a lucrative career in this industry. 

So if you’re still on the fence, here are some of the reasons why you may want to consider becoming a mortgage broker: 

  • Income: Mortgage brokers get paid based on commission. They receive a certain percentage of commission for every loan they originate. For most brokers, this is around 2%. As a result, you mortgage brokers essentially have unlimited income potential -- you just have to be willing to work for it. On average, mortgage brokers make around $92,262 per year -- well above the national average. 
  • Schedule: Mortgage brokers have a great deal of flexibility when it comes to their schedules. If you’re not really interested in the basic nine-to-five corporate lifestyle, then setting your own hours as a mortgage broker could be extremely beneficial for your work-life balance. Furthermore, mortgage brokers are more than capable of working completely remote -- only adding to the flexibility offered by this career choice.  
  • Future: Mortgage brokers can rest assured that they can have a long-lasting career in this industry. So instead of worrying about the future, you can have job security for the foreseeable future. The housing market will always exist and always require the use of mortgages -- even more so as home prices continue to rise. 

How Do You Become a Mortgage Broker?

While the exact process of becoming a mortgage broker varies depending on the state, no matter where you are, the process starts with the National Mortgage License System (NMLS) test. This is a national test that consists of 125 questions that must be answered within three hours. Of those 125 questions, only 115 are actually scored. In order to pass the exam, you need to get at least a 75% on the scored portion. 

In addition to the NMLS test, individual states also have their own sets of requirements in terms of education and applications. For instance, Florida requires 20 total hours of coursework split into both SAFE pre-licensure coursework and state-specific coursework. Once you have completed this coursework and passed the NMLS test, you can apply for your brokers license. Again, exact application fees vary but you can expect to spend a few hundred dollars. 

How to Create a Mortgage Broker Business Plan?

Now that you’ve received your license, it’s time to get started on your actual business. The first step to launching any business involves creating a business plan -- and mortgage brokers are no exception. So here are the different components you need to create an intelligent and impactful mortgage broker business plan: 

Section 1: Executive Summary

The first section in your mortgage broker business plan should be the executive summary. Although this is the first section in the plan, you actually shouldn’t write it until after you’ve completed all the other sections. The other sections will essentially write your executive summary for you! 

But if you need more guidance on this section, think of this as your pitch. Your pitch needs to be short, sweet, and to the point -- no more than a page or two in length. It also needs to capture the attention of the reader and outline the rest of the business plan so that they don’t necessarily have to read the whole thing to get the overall point. 

You may want to include information about the business opportunity, the target market, your business model, your marketing and sales strategies, the competition, a financial analysis, and an implementation plan. 

Section 2: Business Description

The second section in your mortgage broker business plan should be the business description. Within this section, you should include basic information about your business -- think of it as an expanded version of the executive summary. 

Specifically, you will want to cover the “five W’s” -- who, what, where, when, and why. For who, talk about who you are, what your business is, and who your target customers are. For what, talk about your products, services, and business goals. For where, talk about where your business is located. For when, talk about your launch timeframe as well as the timeframe for your goals. Finally, for why, talk about why you are in this business and why potential customers would choose you over the competition. 

Section 3: Market Analysis

The third section in your mortgage broker business plan should be the market analysis. This is where you include relevant information about the mortgage industry. Cover both the present and the future -- in addition to how you’re going to adapt to changes in the future. 

You should also include information about your competitors -- in this case, banks and retail lenders. Talk about competitive weaknesses that you could potentially exploit. Talk about strengths that you could try to tap into yourself. 

Finally, you should also include information about your client. Talk about what they’re looking for within the mortgage process. Cover how you’re going to meet these wants and needs with your unique offerings. 

Section 4: Organization and Management

The fourth section in your mortgage broker business plan should cover organization and management. For some people, this may be quite simple if you’re a one-man operation. However, if you’re collaborating with multiple people, this section will need to be more detailed. Be sure to include relevant information about the experience and responsibilities of everyone on the team -- including yourself. 

Also, be sure to include relevant job titles for everyone on the team. Some examples of industry job titles include Vice President of Mortgage Operations, Vice President of Mortgage Banking, Mortgage Loan Officer, Mortgage Sales Manager, Mortgage Banker, and Mortgage Consultant. 

Section 5: Services and Products Offered

The fifth section in your mortgage broker business plan should cover the services and products that you’re offering. For mortgage brokers, this section will look a bit different compared to other business plans. However, the point remains the same -- you’re going to be offering mortgage services for clients looking to buy homes. 

That being said, there are many different types of mortgages out there that you can offer -- from FHA loans, to VA loans, and even jumbo loans. Make sure to specify if you’re going to focus on a certain type of mortgage. 

Section 6: Establishing Relationships with Lenders

Once you have determined the types of products and services you plan to offer, it’s important to establish relationships with lenders. 

Most lenders have a wholesale channel in which they partner with mortgage brokers. Typically, mortgage brokers need to submit a broker package and get approved with the lender to start offering their loan products to clients.

Section 7: Marketing and Sales

The sixth section in your mortgage broker business plan should cover marketing and sales strategies. After all, you can’t have a successful mortgage broker business without either one! Start by focusing on sales. Talk about how you’re going to sell your mortgage products to prospective clients. 

From there, talk about how you’re going to reach prospective clients. After all, there are tons of mortgage brokers out there -- how are you going to get your name out there? You may want to consider marketing avenues like social media, email, and search engine optimization (SEO). These avenues will be aided by developing a professional broker website. 

Section 8: Funding

The seventh section in your mortgage broker business plan should cover funding. Launching a business of any kind requires funding -- and mortgage brokers are no different. That being said, becoming a mortgage broker often comes with lower startup costs compared to other types of businesses -- especially if you’re a one-man operation. 

Perhaps you need funding to rent out an office space or to buy equipment for your home office. You will also need funding to cover operational costs as well as marketing costs. Try to be as detailed as possible in this section as it can serve as a rough budget that can guide you in future business decisions. 

Section 9: Financial Projections

The eighth section in your mortgage broker business plan should cover your financial projections. You can utilize the information that you gathered from your market research to come up with realistic projections. Whatever your projections, make sure that you have the research and information to back them up. Be optimistic without being overzealous. 

At the end of the day, you’re not bound to your financial projections. Instead, they should act as a road map of sorts. Additionally, they are helpful for potential investors to ensure that your business will actually be profitable. 

How to Launch a Successful Career as a Mortgage Broker?

Once you have a solid business plan laid out, it’s time to take the next steps towards launching a successful career as a mortgage broker: 

Step 1: Establish a Legal Entity

In order to officially launch your business as a mortgage broker, you will need to establish a legal entity. Doing so separates you from your business and protects your personal assets in the event of legal issues. You can either form a sole proprietorship, a limited liability corporation (LLC), or a corporation. 

If you’re a solo mortgage broker, then a sole proprietorship makes sense. On the other hand, if you’re trying to build a more extensive business that involves other brokers and players, then you may want to consider forming an LLC. 

Step 2: Register for Taxes

After you have legally established your business, next you need to register for taxes to ensure that you’re following state and federal requirements. To do this, you will need to apply for an “employer identification number” or EIN with the Internal Revenue Service (IRS). This is a simple and free process. 

From there, you should probably learn more about your tax situation so that you’re not caught off guard come tax season. Your tax structure will vary depending on your business structure, so no matter which one you choose, make sure that you’re aware of the requirements and processes of filing both state and federal business taxes. 

Step 3: Establish Separate Business Accounts

The next thing that you need to do is to establish separate business accounts. Depending on your business structure, doing so may be required by law. Even if it’s not required, it’s simply a good business practice. Not only does it allow you to establish business credit that you can then use to apply for future financing opportunities, but it helps you stay more organized and on top of your financial situation. 

Step 4: Promote and Market Your Brand

The last thing that you need to do to launch a successful mortgage broker business is to promote and market your brand. If you’re a solo broker, you are essentially your brand. The best way to do this is to get on social media. Create business accounts on popular platforms like Facebook, Instagram, Linked In, and even TikTok. You should also establish a Google business profile, fill in the relevant information, and link to your website. 

From there, you can start posting content. When posting content, think about what your target customers want to see. For instance, if you’re targeting first-time homebuyers, you may want to talk about mortgage FAQs to help break down an often confusing process. On the other hand, if you’re targeting more established borrowers, you may want to talk about more technical things like the housing market and interest rate projections. 

The Final Rundown on Mortgage Brokers

If you’re interested in learning more about mortgage brokers, feel free to reach out to Vaster Capital. Our brokers cover a wide range of real estate transactions, including residential, commercial, and land. We offer fast closings, compelling commissions, and customized guidance and assistance. 



Write Your Business Plan | SBA

LLC: Pros and Cons of a Limited Liability Company | NerdWallet

Why Your Business Should Have Its Own Credit | The Balance

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