Whether you’re applying for the NAMB KickStart Independent Mortgage Program or just considering going out on your own, we’re here to help.
This step-by-step guide will show you how to set up your broker shop and give you the tools you need to make it a success.
STEP 1: REGISTER YOUR BUSINESS
- Choose a name and check with your state registry to see if it’s available
- Register with all of the states in which you plan to do business
- Review each state’s requirements for obtaining a mortgage broker license as well as their process for registering your company. Not all states are the same.
STEP 2: SET UP YOUR BUSINESS ENTITY
- Contact an attorney to determine what type of business is best for you. (LLC, S-Corp, etc.)
- File your Articles or other state required filing • Set up your governing documents
- Apply online for an EIN number
STEP 3: SET UP A BUSINESS BANK ACCOUNT
- Set up a trust account, if applicable, for credit report fees and appraisals
- Partner with a bank that doesn’t charge a lot for incoming wire transfers or other “add-on” fees
- Open a business checking account for payroll and fee income
- Go onto the NAMB+ website and search for a payroll company or contact ADP for prices
STEP 4: GET LICENSED AND BONDED
- Start the application for your licenses at the NMLS website
- Submit fees and choose the states where you want to conduct business
- Apply for a bond per state requirements. Most states require a surety bond of $50,000. Contact your insurance provider or visit the NAMB+ website for a list of preferred companies.
- Once approved by the NMLS, your new broker shop will need to sponsor you as an MLO
NOTE: The NMLS website is an incredibly valuable resource. Here are just a few things you can do quickly and easily right from their site.
- Create a company account
- Review your state requirements for company licensing. Be sure to review all license types to determine the correct type needed. If you have any questions, each downloadable checklist has a contact number for that state’s licensing department
- Get help creating and modifying company information with NMLS Quick Guides. If further help is needed, contact the NMLS call center at 1-855-665-7123
- Stay on top of any reporting requirements. If you hold a state license, you will be required to file a quarterly Mortgage Call Report through NMLS. In addition, you should research your own state for any annual reports that are required. Check the state’s website or call to confirm reporting requirements
STEP 5: SET UP YOUR WEBSITE
- Build your site, choose a domain name and publish it online
- A number of companies offer these services, including GoDaddy
STEP 6: OBTAIN BUSINESS INSURANCE
- Contact your insurance agent or Liberty Mutual (a NAMB+ provider) about business insurance
- Business insurance is optional in most cases, but it can minimize exposure and risk
STEP 7: SUBMIT BROKER APPLICATIONS TO LENDERS
- Considering completing your broker packages for approval through BrokerGuard, a NAMB provider
- Find at least three lenders to partner with that fit your needs. Suggested lenders include:
- Conventional: United Wholesale Mortgage, Pacific Union Financial, Freedom Mortgage
- FHA: Caliber Home Loans, REMN Wholesale Mortgage, Franklin American
- Low credit: Carrington Mortgage, Maverick Wholesale, American Financial Resources
- Non-Agency: Union Bank, US Bank, CMG Financial • Consider banks that have niche products (FHA 203k, Construction, etc.) • Consider lenders that don’t require a net worth requirement or a monthly volume requirement
STEP 8: OBTAIN LOAN ORIGINATION SOFTWARE
- Calyx Point has integrations with Fannie Mae and credit reporting agencies
- Encompass has integrations with Fannie Mae, Freddie Mac and credit reporting agencies
- Research other software options and choose one that you are comfortable with
STEP 9: SIGN UP WITH A CREDIT REPORTING AGENCY
- Contact a company that fits your pricing options and credit needs. Keep in mind that this will be an ongoing expense. Options include Equifax, Transunion and Kroll Factual Data, Credit Plus and Birchfield Credit (a NAMB+ provider)
- Arrange for the credit reporting agency to be able to pull credit from within your Loan Origination System
STEP 10: GET YOUR NAME OUT THERE
- Create business cards. Vistaprint is a NAMB+ provider
- Get active on social media
- Start marketing your new business!