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How to Become a Mortgage Broker in 8 Steps

Last updated 03/26/2024 by

Camilla Smoot
The exact requirements to become a mortgage broker vary by state but the basics are the same. You need a high school diploma, take pre-licensure classes administered by the NMLS, pass the NMLS test, and register their business in your state. There’s also the matter of paying the surety bond, which also varies by state. Here’s a step-by-step guide about how to become a mortgage broker.
Do you enjoy helping people achieve their financial goals? Are you good with people and numbers? If so, you might enjoy working as a mortgage broker. Mortgage brokers are in high demand these days and for good reason. They help people buy homes by finding them the best mortgage rates and terms. If you’re thinking of becoming a mortgage broker, read on to find out what you need to know.

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8 Steps to becoming a mortgage broker

Mortgage brokers analyze mortgage loan products and provide advice to potential borrowers on the requirements, availability, interest rates, and terms of mortgage loans. Mortgage brokers are usually not lenders. Instead, they serve as a middleman between borrowers and lenders.

What is a mortgage broker?

A mortgage broker is an intermediary between borrowers and lenders. They help home buyers compare mortgage lenders and home loan offers. Mortgage brokers help their clients apply for mortgages and negotiate terms with lenders. They also gather paperwork from borrowers, process it, and pass it on to mortgage lenders. Brokers earn a commission from either the borrower or the lender or both at closing.
Note that mortgage brokers are different from loan officers or a lender, though the terms are sometimes used interchangeably. Loan officers focus more on recommending types of loans and reviewing documents. A mortgage lender loans money directly to you. Mortgage brokers typically find and work with lenders for their clients.
Here are the 8 steps you must complete to become a mortgage broker.

Step 1: Obtain a high school diploma or GED

The first step to becoming a mortgage broker is by earning your high school diploma or GED. While an associate’s or bachelor’s degree is not necessary, earning in a relevant area, such as business, finance, accounting, real estate, or economics, will certainly help.

Step 2: Take the NMLS pre-licensure mortgage broker classes

Before earning your mortgage broker license, you first need to complete a 20-hour pre-licensure program overseen by the National Mortgage License System (NMLS). This program teaches you about federal and state mortgage laws, financial regulations, and broker ethics. Training requirements vary by state. See the table below for more details on pre-licensure education (PE) and continuing education requirements by state.

Step 3: Pass the National Mortgage License System test

Everyone must pass the NMLS test to get their license and become an official mortgage broker. This exam will test you on mortgage practices and state guidelines and regulations. You need at least a 75% to pass both the state and federal sections of the exam.
After earning your license, be sure to renew it by passing a criminal background check and credit check.

Step 4: Register and establish your mortgage brokerage

Now that you have passed your exam and coursework, you are ready to register your mortgage brokerage business in your state. The requirements to do so vary by state, but usually include the following:
  • Choose a business name.
  • Pick a location.
  • Select a business structure (sole proprietorships, partnerships and LLCs are the most common choices).
  • Register your business with local, state, and federal agencies.
  • Obtain your federal and state tax ID numbers
  • Apply for licenses and permits
One option is to work solely as an online brokerage business. Some states require you to have a physical location, while others do not. Choosing to operate remotely could allow you to save price on renting a space and make you more accessible to others throughout the state you are licensed in.

Step 5: Get a mortgage broker license

Requirements to get your mortgage license vary by state. Application fees usually range between $1,000 and $2,000. To qualify for a license you will need to take the following steps:
  • Provide your financial statements.
  • Show evidence of completing the pre-licensing coursework.
  • Provide SAFE test results.
  • Provide fingerprints for FBI criminal background check.
  • Get a credit report authorization.
  • Obtain a surety bond

Step 6: Obtain a surety bond

Obtaining a bond provides additional security for your clients and ensures you will follow the standards that regulate the trade. It also builds credibility for your clients. Each state has a different amount of a brokerage bond. The table below shows the minimum bond amount per state.
StateMinimum bond amountStateMinimum bond amount
Alabama Mortgage Broker Bond$25,000Nebraska Mortgage Banker Bond$100,000
Alaska Mortgage Broker Bond / Mortgage Lender$75,000Nevada Mortgage Broker Bond$50,000
Arizona Mortgage Broker Bond$15,000New Hampshire Mortgage Broker Bond$50,000
Arkansas Mortgage Broker Bond / Mortgage Banker/ Mortgage Servicer$50,000 – $150,000New Jersey Residential Mortgage Broker Bond$150,000
California Residential Mortgage Lender Bond$50,000New York Mortgage Broker Bond$10,000
Colorado Mortgage Loan Originator Bond$25,000New Mexico Mortgage Loan Company Bond$50,000
Connecticut Mortgage Broker Bond$50,000North Carolina Mortgage Broker Bond$75,000
Delaware Mortgage Loan Broker Bond$25,000North Dakota Mortgage Broker Bond$25,000
District Of Columbia Mortgage Broker Bond/ Mortgage Dual Authority / Mortgage Lender$12,500 – $50,000Ohio Mortgage Broker Act Bond$50,000
Georgia Mortgage Broker Bond$150,000Oklahoma Mortgage Lender Bond$100,000
Hawaii Mortgage Servicer Bond$100,000Oregon Mortgage Lender Bond$50,000
Illinois Mortgage Broker Bond$25,000Pennsylvania Mortgage Broker Bond / Mortgage Lender / Mortgage Servicer$50,000 – $500,000
Indiana Mortgage Lending Bond$100,000Rhode Island Lender Bond$50,000
Iowa Mortgage Broker Bond$100,000South Carolina Mortgage Broker Bond$25,000
Kansas Mortgage Company Bond$50,000South Dakota Mortgage Brokerage Bond$25,000
Kentucky Mortgage Broker Bond/ Mortgage Company License$50,000 / $250,000Tennessee Mortgage Lender/Broker/Servicer Bond$90,000
Louisiana Residential Mortgage Lending Bond$25,000Texas Residential Mortgage Loan Servicer Bond$25,000
Maine Mortgage Loan Broker Bond/ Mortgage Loan Originator$25,000 / $50,000Utah Mortgage Loan Originator Bond$12,500
Maryland Mortgage Lender Bond$50,000Vermont Mortgage Broker Bond$25,000
Massachusetts Mortgage Broker Bond/ Mortgage Lender$75,000 – $500,000Virginia Mortgage Broker Bond$25,000
Michigan 1st Mortgage Broker/Lender/Servicer Bond$25,000Washington Mortgage Broker Bond$20,000
Minnesota Residential Mortgage Servicer Bond$100,000West Virginia Mortgage Broker Bond /Mortgage Lender Bond$50,000
Mississippi Mortgage Broker Bond$25,000Wisconsin Mortgage Broker Bond/ Mortgage Banker / Mortgage Loan Originator$120,000 – $300,000
Missouri Residential Mortgage Loan Broker Company Bond$50,000Wyoming Mortgage Lender/Broker Bond$25,000
Montana Mortgage Broker Bond$25,000
Go to NMLS select your state and complete the surety bond form. Sign your bond certificate and send it to the state with your license application. After a reviewal process, you will receive your license. Once this is complete, you will officially be a licensed mortgage broker and have now become a mortgage broker.

Step 7: Network and build relationships

Networking is crucial to building your cliental and becoming a successful mortgage broker. Real estate agents and mortgage brokers frequently work together to ensure that transactions on homes run smoothly. You can often find them in the same office together. Networking with real estate agents is useful as they are often asked to recommend mortgage brokers to their clients. Build a good relationship and you could be who they recommend.
Mortgage brokers can work independently, but when starting in the industry, it is generally better to work in a firm before becoming self-employed. Mortgage brokers usually work at a mortgage broker firm or another lending institution. Networking with real estate agents, lending institutions, banks, and others is important for mortgage brokers to build their reputation and cliental base. Working in a firm allows more opportunities to network and build a cliental base. This is why starting at a firm is recommended.

Step 8: Pursue continued education and training

Even after earning your degree and license, you are not done learning. To be a successful mortgage broker, you must continue your education and training. You can do so by taking courses that educate and improve your knowledge of the industry. Courses can also help you understand federal and state laws and regulations. The table below provides more details on the continued education (and pre-licensure) requirements by state.

Mortgage broker state education requirements

Education requirements vary by state. The table below shows the pre-licensure education (PE) and continuing education (CE) hour requirements by state.
StatePE HoursTotal PE HoursState CE HoursTotal CE Hours
Visit National Mortgage License System for more information on course providers and state requirements.

What does a mortgage broker do?

  • Applying for a mortgage loan with lenders for their clients.
  • Completing closing papers with a loan officer and insurance brokers.
  • Educating clients on the loan process, what a mortgage loan is, documentation needed, and the real estate market.
  • Reviewing clients’ financial and credit history.
  • Comparing lender fees to ensure the client gets the best deal.
  • Networking with lenders and others in the mortgage industry.
  • Explaining and sharing different mortgage loan options to clients.
  • Reviewing and making sure loans follow laws and regulations.
  • Finding loan programs with the lowest closing cost and best rates for your clients.

How much does a mortgage broker make?

According to Indeed, the average mortgage broker’s salary is around $80,000 a year in the United States. The base salary ranges between $50,000 to $90,000. A mortgage broker’s salary varies and is influenced by clientele, location, and how well the industry is doing. Mortgage broker fees are usually between 1% to 3% of the loan amount. Federal regulations cap fees at 3% of the loan amount.

Frequently asked questions about mortgage brokers

How long does it take to be a mortgage broker?

It first depends on if you chose to get a higher education, and which degree you choose. While an associate’s or bachelor’s degree is not necessary for the industry, it is helpful. After getting a two or four-year degree, it could take around 45 days to complete the classes and get licensed. This could vary between states, however, as each has its own set of requirements.

Do you need qualifications to be a mortgage broker?

The necessary qualifications you need to be a mortgage broker are a high school diploma, taking the NMLS coursework and passing the exam.

Can anyone be a mortgage broker?

Most people can become a mortgage broker if they put their mind to it and have the time and resources to meet the requirements. The minimum requirements include having a high school diploma or GED, passing a criminal background check, passing the NLMS coursework and exam, getting a state license, registering your business, and paying the surety bond.

Key takeaways

  • The minimum requirements to become a mortgage broker are obtaining a high school degree, taking pre-licensing courses, passing the licensing exams, registering your business, getting a state license, and paying a surety bond.
  • An associate’s or bachelor’s degree is not required to become a mortgage broker, but it is highly recommended and could make you more competitive in the field.
  • Networking and building relationships are essential to building your business and earning money.
  • To renew your license, you must complete continued education, agree to background checks and credit checks.

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Camilla Smoot

Camilla has a background in journalism and business communications. She specializes in writing complex information in understandable ways. She has written on a variety of topics including money, science, personal finance, politics, and more. Her work has been published in the HuffPost,, Deseret News, and more.

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