Dual Revenue Streams - Become Both A Real Estate Agent & Mortgage Broker | Here's How!

Are you looking to increase your real estate earnings? A career in real estate is built on building strong relationships with clients and providing extensive knowledge of the real estate industry. Some of the best ways to increase your earnings and bottom line per customer in residential real estate is by exploring the entire process a homebuyer goes through from start to finish.

Did you know that becoming both a realtor and mortgage broker can help double your income?

Buyers Need a Team of Professionals

As the real estate market continues to shift, challenges arise for those seeking to buy their dream homes. With low inventory, high interest rates, and many prospective buyers competing for the limited number of homes available, the process can become frustrating and complicated. That's why now more than ever, buyers need a team of professionals who can guide them through every step of the home purchase journey. Real estate agents and loan officers have long been valuable resources, but what if there was a way to serve your clients even more efficiently and effectively? By becoming a mortgage broker as well as a real estate agent, you can help your clients navigate the complex landscape of the housing market while also collecting two sources of income for each sale.

For those in the real estate industry who are looking to maximize their earning potential, becoming both a real estate agent and mortgage broker can be a game-changer. Not only does being an independent contractor in both fields allow for more flexibility and control over your schedule, but it also creates a great opportunity to drive financial independence. By serving as both a real estate agent and mortgage broker, you are able to provide your clients with an unparalleled level of service from start to finish. From helping them find their perfect home to securing the best deal on their mortgage, you are able to ensure that your clients are well taken care of every step of the way. With two revenue streams per sale, developing a dual-income stream has proven to be a good way to build financial stability and security for those willing to put in the time and effort.

Explain why becoming both a real estate agent and a mortgage broker is an ideal strategy for making money, with the clients you are already working with.

Steps to Become a Licensed Real Estate Agent

Becoming a licensed real estate agent can seem like an overwhelming process, but with the right steps, it can be achievable.

1. First, you will need to complete a real estate salesperson course, which typically covers real estate legalities, principles, practices, and finance.

2. Next, you will need to pass the real estate license exam, which may include multiple choice questions and scenarios. Additionally, some states may require additional certifications or background checks.

3. Once you pass the exam and meet any additional requirements, you will be a licensed real estate agent and ready to start your career helping clients buy and sell homes.

4. With this license in hand, you can also explore opportunities to become a mortgage broker and earn dual revenue streams from each sale.

Deciding on the Type of Mortgage Company

When deciding between working at a bank, credit union, mortgage lender or mortgage broker, it's essential to consider the differences in roles and responsibilities. Loan officers are all required to obtain a NMLS number, but based on the type of lender, the steps and requirements may be different.

As a mortgage lender, you'll be working directly with the bank or financial institution that provides the loan to the homebuyer. This role often involves a steady income and more stability but less flexibility. On the other hand, as a mortgage broker, you act as an independent agent connecting homebuyers with potential lenders. This role offers greater flexibility and the opportunity to work with a variety of lenders, but income may vary based on the number of clients and loans secured. Understanding these differences can help you make an informed decision about which role is the best fit for your career goals and working style.

Here are some of the key differences between working as a mortgage lender and a mortgage broker:

Mortgage Lenders, Banks & Credit Unions

• Approves and funds mortgage loans directly to borrowers

• Works for a financial institution, such as a bank or credit union

• May specialize in certain types of loans, such as conventional, FHA loans, or VA loans

• May offer competitive interest rates and fees

• May have a limited selection of loan products

Mortgage Broker

• Acts as an intermediary between borrowers and mortgage lenders

• Works with multiple lenders to find the best rates and loans for a borrower's needs

• Can help borrowers with a variety of credit scores and financial situations

• May offer a wider range of loan products, including non-traditional loans

To help decide which one is right for you, here are some things to consider:

Your experience and qualifications: If you have a background in finance and lending, and you are confident in your ability to assess borrowers and approve loans, then working as a mortgage lender may be a good option for you. However, if you are new to the industry, or you are not interested in the underwriting and approval process, then working as a mortgage broker may be a better fit.

Your career goals: If you are interested in working for a financial institution and building a long-term career in the mortgage industry, then working as a mortgage lender may be the right path for you. However, if you are more interested in being your own boss and having the flexibility to work with different lenders, then working as a mortgage broker may be a better option.

Your clients: If you are interested in working with a wide range of clients, including those with challenging credit or financial situations, real estate investors, and other potential buyers, then working as a mortgage broker may be a good fit for you. However, if you are more interested in working with clients who have good credit and are qualified for traditional loans, then working as a mortgage lender may be a better option.

Ultimately, the best way to decide whether to work as a mortgage lender or a mortgage broker is to weigh the pros and cons of each career path and consider your own personal goals and preferences.

In addition to the above, here are some other factors to consider:

• Compensation: Mortgage lenders typically earn a salary plus commission, while mortgage brokers typically earn commission only. For real estate professionals, commission only is part of the job, and with more risk comes more reward.

• Training and support: Mortgage lenders typically receive training from their employer, while mortgage brokers typically need to complete their own training and certification programs. If you need training to get started, choosing the best mortgage broker who offers that training should be a key factor.

• Career outlook: The job outlook for both mortgage lenders and mortgage brokers is projected to be faster than the average growth of other careers over the next decade.

If you are a real estate broker and your ultimate goal is to open your own mortgage company, choosing to be a Mortgage Broker is the easiest and fastest path to mortgage company ownership. If you or one of your agents, simply want to work at a mortgage company, either lending institution will work.

Getting Started as a Mortgage Broker

Becoming a licensed mortgage broker & loan officer although lucrative, requires some time and preparation. However, before you can start reaping the rewards you must have a clear understanding of the industry and the necessary requirements.

If you are looking to get starting as a loan officer, you'll need to get the required licenses. This means taking required education, passing an examination, and registering with the Nationwide Mortgage Licensing System. It's important to note that some states may require a certain number of experience hours before you can apply to become a licensed mortgage broker.

• Complete the required pre-licensing education. This typically includes 20 hours of coursework on topics such as mortgage lending, ethics, and federal law. You can find approved pre-licensing courses through the National Mortgage Licensing System (NMLS).

• Pass the SAFE Mortgage Loan Originator Test. This is a national exam that covers a variety of topics related to mortgage lending. You can register for the exam through the NMLS.

• Choose and get sponsored by a mortgage brokerage.

Once you have cleared these requirements, you can start working on building relationships with lenders and borrowers to start growing your business. By serving your clients as both a real estate agent and a licensed mortgage broker, you have the opportunity to offer them a unique and comprehensive service that can set you apart from your competing agents.

Opening an Independent Mortgage Brokerage

If your ultimate goal is to open as a independent mortgage broker, in addition to obtaining a loan originators license, you will also need to:

1. Apply for a mortgage broker license in your state. The licensing requirements vary from state to state, but you can typically find information on the NMLS website. You will also need to obtain a surety bond.

2. Form a business entity. This could be a sole proprietorship, partnership, LLC, or corporation. You may also need to register your business with the state and obtain a business license.

3. Open a business bank account and credit card. This will help you keep your personal and business finances separate.

4. Set up accounting and bookkeeping systems. This will help you track your income and expenses and ensure that you are in compliance with all applicable tax laws.

5. Get mortgage broker insurance. This will protect you from financial losses in the event that you are sued or make a mistake.

6. Market your business and start building relationships with real estate agents and other partners. This will help you generate leads and close more loans.

Once you have completed all of these steps, you will be ready to open your mortgage broker business and start helping borrowers obtain the loans they need.

If you would like more detail on opening your own mortgage brokerage, we have written another article that you can access HERE

Compliance & RESPA Rules

If you are going to be both a licensed realtor and licensed mortgage loan originator or mortgage broker owner, it is important to take steps to comply with RESPA and other real estate laws. Here are some important things to keep in mind:

• Do not accept referral fees from settlement service providers (SSPs). RESPA prohibits real estate agents from receiving anything of value for referring business to SSPs, such as mortgage lenders, title companies, and home inspectors.

• Do not steer borrowers towards certain SSPs. You must present borrowers with a list of SSPs and allow them to choose the provider they want to use. You cannot pressure borrowers to choose a particular SSP or offer them incentives to do so.

• Do not split fees with SSPs. RESPA prohibits mortgage lenders from splitting fees with real estate agents, unless the fee is for a service actually performed.

• Disclose all relationships with SSPs to borrowers. You must disclose any financial or business relationships you have with SSPs to borrowers in writing before they close on a loan.

It will be more important for you to take some additional steps for complying with RESPA than most other:

• Keep detailed records of all your business transactions. This will help you to demonstrate compliance with RESPA in the event that you are audited by the Consumer Financial Protection Bureau (CFPB).

• Educate yourself about RESPA requirements. The CFPB has a number of resources available to help real estate agents and mortgage loan officers understand their obligations under RESPA.

• Seek legal advice if you have any questions or concerns. A real estate attorney can help you to ensure that you are complying with all applicable laws and regulations.

It is important to note that violating RESPA can have serious consequences. The CFPB can impose fines and penalties on real estate agents and mortgage loan officers who violate RESPA, and it can also suspend or revoke their licenses.

The Path to a Dual Career: Embrace the Future of Real Estate

Navigating the complexities of the real estate and mortgage industries may seem daunting at first, but the rewards are substantial. By diversifying your skills and becoming both a real estate agent and a mortgage broker, you open up a world of opportunities to serve your clients more comprehensively and effectively. This dual role not only enhances your professional value but also boosts your income potential significantly. As you embark on this journey, remember that thorough preparation, continuous education, and strict adherence to industry regulations are crucial for success. With dedication and perseverance, you can achieve financial independence and create a thriving business that stands out in the competitive real estate market. The future is bright for those willing to invest in themselves and their clients, making dual revenue streams a viable and lucrative strategy for real estate professionals. Start your journey today, and become the go-to expert your clients need in their real estate and mortgage endeavors.

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