Becoming A Mortgage Broker - Advice Please

Rcraigs

I have been property developing for 2 years now and I am seriously considering becoming a mortgage broker.

I have a fair understanding on the logistics of mortgages through investing but obviously no real experience, Im considering asking my own broker to take me on as a newbie and hopefully train me up. He owns a fairly large financial services company? Is this a wise decision or should I be approaching a bank?

Could anybody tell me what the average start up wage is and is the job commission based?

What qualifications will I need, what is the cost to obtain these and what time period would you expect from somebody to be giving mortgage advice from a beginner?

Any advice is much appreciated.

hydsta

Hi, to be a mortgage broker/advisor your have to take the industry standard qualifications which are the cemap exams (certificate in mortgage advice and practice). You can buy the study texts and the initial exam entry from the IFS. The cemap qualification has 3 modules and the IFS charge £135 per module. Check their website for further details: http://www.ifslearning.ac.uk/qualifications/courses/cemap.cfm.

Its a home study course, when you're done revising, you book the exam which you take at those test centres where you do the driving theory tests. If you find it hard to study in isolation, you could always to classroom based cemap where you're taught by a mortgage advisor. Check on google, there's quite a few companies offering that. They are vastly more expensive, however some guarantee a job placement afterwards, free exam re-sits and so forth. Most of these companies offer a crash course and claim you can pass after in 7 days etc. However there's a wealth of information that has to be understood and remembered so might take longer.

I passed my cemap in 3 months, though it can take longer. It really depends on how much time you have to revise. Its recommended to spend 60 hours per module.

There is a further paper, the advanced cemap but that's really for when you want to specialise in a certain area, commercial mortgages, buy-to-lets etc. Once you complete cemap you can start applying for jobs as a mortgage advisor in banks/building societies/estate agents etc, although some places will take you with just cemap module 1 passed and will expect you do study for the other 2 papers while you work. They might even pay for it. You of course will have a full credit/criminal check done on you before your employed and your finances have to be squeaky clean. You will have to be authorised by the FSA aswell.

Banks and other financial institutions still favour customer service/sales experience especially face-to-face and not necessarily in mortgages, as a big bonus. The exams are just to show you know your stuff or are committed to learn it. So your inexperience in the mortgage industry shouldnt be a problem. You could of course try going self-employed working as an appointed representative of a network. However in the current market and without your own client base it could be tough.

You could join your friends firm however it might be easier to join a bank for a year or two to learn the ropes and it might be better making mistakes on the banks clients instead of your own.

Average wage varies but in a bank/building society you're going to be limited to about 22-35k basic. Its a heavily commissioned job but you might expect on target earnings up to 50k. Again it varies and as a newbie you're likely to be on the bottom end of those figures.

In the broker firm i work at based in central london, the top advisor makes £17000/mth usually, shocking but true, i have seen the accounts. However in the last few months his earnings have dropped to about the 8k/mth region. Still a hefty amount but a massive drop from his point of view. The lowest earning advisor still pulls in about 4k/mth on average. These are seasoned pro's though but i thought i'd show you the potential that can be achieved by going self-employed.

thriftymomma

Would you still have to have a squeaky clean credit record to be a self employed mortgage broker? Sorry to ask a stupid question.

hydsta

yep, self-employed or employed, makes no difference, credit history must be superb. The logic goes that if you can't manage your own finances, then how do you expect to advise others on theirs?

Rcraigs

hydsta wrote: »

Hi, to be a mortgage broker/advisor your have to take the industry standard qualifications which are the cemap exams (certificate in mortgage advice and practice). You can buy the study texts and the initial exam entry from the IFS. The cemap qualification has 3 modules and the IFS charge £135 per module. Check their website for further details: http://www.ifslearning.ac.uk/qualifications/courses/cemap.cfm.

Its a home study course, when you're done revising, you book the exam which you take at those test centres where you do the driving theory tests. If you find it hard to study in isolation, you could always to classroom based cemap where you're taught by a mortgage advisor. Check on google, there's quite a few companies offering that. They are vastly more expensive, however some guarantee a job placement afterwards, free exam re-sits and so forth. Most of these companies offer a crash course and claim you can pass after in 7 days etc. However there's a wealth of information that has to be understood and remembered so might take longer.

I passed my cemap in 3 months, though it can take longer. It really depends on how much time you have to revise. Its recommended to spend 60 hours per module.

There is a further paper, the advanced cemap but that's really for when you want to specialise in a certain area, commercial mortgages, buy-to-lets etc. Once you complete cemap you can start applying for jobs as a mortgage advisor in banks/building societies/estate agents etc, although some places will take you with just cemap module 1 passed and will expect you do study for the other 2 papers while you work. They might even pay for it. You of course will have a full credit/criminal check done on you before your employed and your finances have to be squeaky clean. You will have to be authorised by the FSA aswell.

Banks and other financial institutions still favour customer service/sales experience especially face-to-face and not necessarily in mortgages, as a big bonus. The exams are just to show you know your stuff or are committed to learn it. So your inexperience in the mortgage industry shouldnt be a problem. You could of course try going self-employed working as an appointed representative of a network. However in the current market and without your own client base it could be tough.

You could join your friends firm however it might be easier to join a bank for a year or two to learn the ropes and it might be better making mistakes on the banks clients instead of your own.

Average wage varies but in a bank/building society you're going to be limited to about 22-35k basic. Its a heavily commissioned job but you might expect on target earnings up to 50k. Again it varies and as a newbie you're likely to be on the bottom end of those figures.

In the broker firm i work at based in central london, the top advisor makes £17000/mth usually, shocking but true, i have seen the accounts. However in the last few months his earnings have dropped to about the 8k/mth region. Still a hefty amount but a massive drop from his point of view. The lowest earning advisor still pulls in about 4k/mth on average. These are seasoned pro's though but i thought i'd show you the potential that can be achieved by going self-employed.

Thankyou so much for your advice hydsta, Im based in London also. Fancy taking me on as a newbie!??

Going back to your point on working for a bank first...Is there a demand for this type of job within banks? I would prefferbly like to work within buy-to-lets but as you said you must get to grips within the principals first.

If I did decide to work for my friend I heard somewhere that it takes at least a year under supervision untill you would be aloud to give advice to clients?

Tiddler_2

hydsta wrote: »

yep, self-employed or employed, makes no difference, credit history must be superb. The logic goes that if you can't manage your own finances, then how do you expect to advise others on theirs?

Whilst there is a large element of truth in the above - your credit history doesn't HAVE to be squeaky clean or superb.

Companies often take that stance, but it is based purely on an assessment of the risk to the client. If you have a poor credit history, then the FSA consider that your clients are at risk because you may try to sell them a product based on receiving a higher procuration fee rather than what is best for the client.

I would imagine that up and down the country quite a few mortgage advisers are getting close to missing payments on credit etc because of the downturn in business.

I'd agree that the best way to get the on the job training is to go via a bank/building society. The proc fees/commission earned on a case are based on the amount of the mortgage taken out usually around 0.35%. So if you are in London the average earnings will be a lot higher than if you are further north (i'm in the Midlands and I would guess our average loan amount is around £100k - £150k)

With regards to timescales before being let loose on the public, then there is no specified timescales, you just have to be assessed as being of "competent status". As in most things in life everyday in mortgage advising is a school day - particularly at the moment in trying to find ways to generate business/earnings.

For a guide on vacancies/earnings, check out https://www.reed.co.uk, may also give you an idea of interest in these jobs aswell - though I would take some of the vacancies with a pinch of salt as the same ones appear for weeks on end, and some may be just to get your details on their file.

nedret

Hi at the moment am doing cemap course and will be taking my first exam soon. I would like to find out what sort of questions will come in first exam unit 1 introduction to the financial services and products and unit 2 uk fanancial services and regulation.

I want to know who passed this exams and would be good to get some tips on how to study.

dunstonh

Over half of new advisers leave the industry within 2 years having failed to make a go of it. That was in the good times too. Many of those end up in debt and the most common reason for failure is lack of clients.

You would be entering at pretty much an awful time. You need to ask yourself how you intend to get clients in future. No clients = no income.

geoffky

your timing sucks....sorry just had to say that...its like becoming a ice cream salesman in the artic..

koexelek

geoffky wrote: »

your timing sucks....sorry just had to say that...its like becoming a ice cream salesman in the artic..

You've given me an idea for a change of career.........

It can't be any more difficult than what I am doing now:rotfl::o

Conrad

nedret wrote: »

Hi at the moment am doing cemap course and will be taking my first exam soon. I would like to find out what sort of questions will come in first exam unit 1 introduction to the financial services and products and unit 2 uk fanancial services and regulation.

I want to know who passed this exams and would be good to get some tips on how to study.

What do you make of the economic news then? Debt collection would be more conducive.