Want To Know How To Become A Mortgage Broker In California? Let’s Find Out.
The mortgage lending industry in California is witnessing strong growth and the demand for skilled mortgage brokers is on the rise. If you’re wondering how to become a mortgage broker in CA, start by meeting the state’s licensing requirements, such as completing pre-licensing education and passing the SAFE MLO exam.
Working in California’s booming mortgage lending industry can be a profitable career path, offering you a stable work-life balance and better job fulfillment.
Mortgage brokers are highly useful to assist buyers who want to obtain financing for purchasing a new property or refinancing an existing one.
Mortgage brokers are responsible for assessing, evaluating, and understanding the credit needs of clients and suggesting to them the most suitable loan plan or service.
The primary responsibility of a mortgage broker in California is to help identify a lender, find loan options that work for the individuals they are assisting, and then navigate them through the process and various stages of securing a loan.
If you’re seeking job security and the opportunity to work from home or in a hybrid work model, a career as a mortgage broker may be right for you.
With California’s multifaceted and aggressive real estate market, there are endless opportunities for prospective mortgage brokers who wish to establish a prosperous career.
There are Californian mortgage brokers who are able to earn a six-figure salary each year, and with several years of experience and a favorable customer base, they can earn up to $120K.
The more expensive the property, the greater commission you can earn as a mortgage broker: commonly 1 to 2 percent of the loan amount.
Because you’ll serve both borrowers and lenders, you could also operate as a free agent for a mortgage broker or even start one of your own if you’re the entrepreneurial type.
The demand for residential real estate and housing is continuing to touch new heights and as more buyers line up to invest in California, there are exciting prospects for brokers.
If you are curious to learn more about how to become mortgage broker in California and start a rewarding career, this post will answer all your questions in one place.
One of the key requirements and essential steps in starting a career in California’s mortgage lending industry is getting a mortgage broker license.
As per state law, only licensed professionals are legally authorized to work with clients and assist consumers in making important financial decisions. If you’re wondering how to become a mortgage broker in CA, obtaining the necessary license is the first step.
Without a valid mortgage broker license, your career will not flourish and you will not become compliant with the industry laws and regulations.
In this post, you will learn about the step-by-step process of how to obtain your CA mortgage broker license along with the other key aspects of working in this industry.
What Is a Mortgage Broker License and How to Become a Mortgage Broker in CA?
The California mortgage license also known as a mortgage broker license is a legal tender that is required for anyone who wants to broker consumer loans and mortgage services.
With a mortgage broker license, you will be legally able to work with consumers and help them obtain financing for their needs and requirements.
Under the California Finance Lenders Law, only professionals with a valid, state-issued license can work on behalf of lenders and manage or broker loans in the state.
Since mortgage brokers partner with lenders like banks, private companies, institutional lenders, and credit unions, it is a regulatory requirement to hold an active license.
Beyond legal and regulatory requirements, there are multiple benefits and advantages of having a mortgage broker license in California.
As per California law, licensed professionals can work with consumers anywhere in the state and earn commissions by brokering mortgage loans for their clients.
Since buying a new house or refinancing an existing home is an important financial and personal decision for many consumers, they seek the assistance of a licensed professional.
With a valid mortgage broker license in CA, your credibility will be boosted and you will be perceived as trustworthy and skilled by potential clients, which will boost your business.
What does a mortgage broker do?
Before you become a mortgage broker, and before you even take the steps to get your license, it is good to be aware of all of the things you will be doing on the job.
Key takeaways: As a potential mortgage broker partner, we are in search of individuals who understand pre-sales and marketing and have graduated in or have experience in financing, accounting, or business management.
To learn how to become a mortgage broker in CA, you need to master the skills to guide your clients effectively. As a mortgage broker. You will become the key expert for your customers who seek advice through the mortgage process and will walk with them through challenges because you know how to handle them.
A day in the life of a California mortgage broker is quite an exciting one, with so much on your plate to handle and so many roles to play.
The primary role of the mortgage broker would be to interact with clients to help them through the process of obtaining a loan from the initiation of the loan application process to closing.
You will be a client-facing mortgage broker; you will meet with prospects and clients, chat with them, and listen to what they have to say to finance their needs.
You will also have to analyze the credit standings and the financial status of individuals from the public who are applying for a home loan.
You will recommend the best financial products, plans, and services personalized to each client’s family based on their income statements, credit reports, tax stubs, and other financial issues.
Not only do you need to be sharp with money and know accounting, but you also need to communicate, have interpersonal and sales skills, trust the client, and get them through the process of getting a loan.
Plus, you will work with underwriters, loan officers, and appraisers to be able to close loans fast for your clients.
Educating and informing the clients about mortgage details like mortgage payment terms and interest rates, and also the conditions of keeping up wage payments, are part of a mortgage broker's job.
You will be performing several types of work as well, and you must complete the necessary training and education that will provide you with the skills you need.
Then, we’ll dive deep into how you can become a mortgage broker in California so you approach the process feeling good.
Be a mortgage broker in California in just a few steps
To get approval for a license of a mortgage broker in California, you will have to make yourself ready to follow a certain step-by-step procedure in an organized manner.
If you are a complete novice, becoming a licensed radio amateur can appear to be both overwhelming and frightening, but if you approach it logically, it doesn’t have to be that way and of course, the process is designed to be quite simple.
To understand how to become a mortgage broker in CA, you must adhere to the NMLS license requirements
If you are wondering what are the exact requirements to start working as a CA mortgage broker, we have got you covered.
Step 1: Meet the basic eligibility criteria
If you are thinking about how to become a mortgage broker in California, then the very first thing you should do is to get the most basic criteria met.
CA Statutory Requirements According to the California Bureau of Real Estate, in order to obtain a mortgage broker license in CA, you are required to fulfill and verify some of the basic statutory requirements that are in place.
- You should be no less than 18 years of age or older.
- You need to be a graduate of high school or equivalent.
- You must be a U.S. citizen or a lawful resident.
- You need at least a bachelor's degree (preferably in finance, accounting, or business administration).
Only if you meet the minimum statutory requirements as outlined above are you eligible.
Step 2: Register with the NMLS
California, like most states, follows the Nationwide Multistate Licensing System (NMLS) guidelines for issuing licenses for individuals and firms in the mortgage lending industry.
You can register on the NMLS website and create your unique NMLS identification number which will be handy for future use such as license renewal and updating.
Once your account is created, you will receive a unique NMLS identification number which will come in handy for the next set of steps.
Step 3: Complete MLO pre-licensing education
As per the NMLS qualifying education requirements, you must complete 20 hours of NMLS-approved pre-licensing education to become eligible for a license.
Completing pre-licensing education is a mandatory requirement and an essential step in understanding how to become a mortgage broker in CA.
Pre-license education courses and curriculum will teach you about the fundamental principles of working in the mortgage lending industry. Some of the courses will be:
- Federal Laws (3 hours)
- Ethics, Fair Lending, and Fraud Protection (3 hours)
- Non-Traditional Mortgage Lending (2 hours)
- General Electives (12 hours)
In addition to the above courses, you will have to take 2 hours of credits each for the state of California-specific laws and regulations for mortgage loan brokers.
In California, we have two official bodies and two state licensing agencies: the California Department of Financial Protection and Innovation (DFPI) & the California Department of Real Estate (DRE).
It is recommended to verify with the state agency so that you are aware of the latest and most current continuing education requirements for a mortgage broker license.
Note that some employers might require you to have a degree in finance, business administration, accounting, or related field.
When it comes to completing your course credits, you have the flexibility to choose your preferred medium of learning i.e. you can choose to join a physical, classroom-based college or enroll in an online, virtual course.
The important aspect to consider is that you must choose a NMLS approved education provider to ensure you are learning from certified instructors and an accurate curriculum.
Step 4: Submit your licensing application
After completing your course credits, the next step is to submit your mortgage broker license application to the NMLS for review.
The California law requires all applicants to complete mandatory background verification and a criminal history check.
Under the SAFE Act, you are required to submit an electronic scan of your fingerprints for background verification and criminal history check.
Along with your electronic fingerprints, you must submit an updated credit report and disclose any criminal history or felony against you if applicable.
If you’re wondering how to become a mortgage broker in CA, one important step is addressing any past legal or financial issues.
In case you have a record of any unlawful activity or any financial regulatory charges against you, then you must submit a certificate of clearance from the local sheriff’s office.
Step 5: Pass the SAFE NMLS licensing test
With your education complete and your application submitted, it’s time to take the next crucial step in your licensing journey.
If you are thinking about, how do I become a loan officer in California, you must take and pass the NMLS license exam to prove your competence and skills.
As per the NMLS license requirements, aspiring brokers must take the S.A.F.E (Secure and Fair Enforcement) regulated license test.
The test is a multiple-choice question based on the course topics covered in your MLO pre-license education and to pass the test, you must score at least 75 percent or above.
Note that it is mandatory to pass the test if you want to obtain a mortgage broker license in CA and start your career.
Note that it will cost you $110 for every attempt and if you are unable to pass the test in three attempts, you might have to retake your pre-license course classes.
Step 6: Find employer sponsorship
After passing the California NMLS license test and clearing the background verification check, you will receive your mortgage broker license within a few weeks.
However, before working with clients, you must first activate your license. To do so, you need to find employer sponsorship.
In California, newly licensed professionals must work under the supervision and guidance of a state-licensed brokerage firm or broker and gain practical industry experience.
We hope by now you have got the answer to your question - how do you become a mortgage broker in California - if you are eager to start, there’s no better time than now.
Remember that if you meet the basic eligibility requirements, it will take you between 45 to 60 days to complete all the steps discussed above and obtain your license.