How to Become a Mortgage Broker in Ontario
The demand for mortgage brokers, especially in Ontario, has continued to increase over the last several years as the market for real estate remains incredibly hot. There are a ton of people who are looking to buy properties, and they need help getting the money to make their purchase. This is where mortgage brokers come in, and this is where the opportunity is for you.
Dealing with commercial mortgages is a huge opportunity for a variety of reasons, but the biggest factor is the emotions people are dealing with as they try to buy a home and make the right decision for their financial future.
What Would You Do as a Mortgage Broker?
On a base level, mortgage brokers are using their knowledge and experience to help get their clients a better deal. They can help interpret the confusing jargon such as FSCO, and have a better idea of how to handle the new regulations around stress tests for mortgages.
When a client comes to you, you are going to first assess their needs and current circumstances, then get searching for loan products on the market that suit their needs. Additionally, you will do all the complicated legal work and help them navigate the application process. Through all this, you are expected to provide valuable insights into the market, their needs, and how a loan would affect them in the long-run.
You only get paid by bringing deals to loan providers, which means you need to make sure you have strong relationships with them. This changes the incentive structure so you need to find a mortgage that is cheap enough for the lender to pay you and still give your clients a better deal than they could have found otherwise. The only way to do this is by having a large Rolodex and knowing the credit industry inside-out.
Understanding the Role
If you’ve been doing some research on your own, you’ve likely come across the term “mortgage agent” as well. The roles are actually very similar, with the key difference between that a mortgage agent represents a mortgage broker in the dealing of mortgages. A mortgage broker is basically the principal agent on a team and therefore has more responsibility. It is commonly expected that you will start out as a mortgage agent and only gain the autonomy to work on your own once you've gained the experience and gotten your broker’s license.
For the purposes of this article, we will treat them as the same thing under the umbrella of being a mortgage specialist, but you will need to get qualified as a mortgage agent before you become a broker later on.
The knowledge base necessary to be a successful mortgage broker will come from experience, mentorship, and the education portion of the requirements to get your mortgage agents license. Understanding the credit industry and how everything is connected will help you to see how timing, financial position, and other variables work together to affect your clients’ buying ability. You will then be able to leverage all your resources to make the best decision for your client. In the case that your prospective client is turned down by a larger bank, you will have an option of private mortgage lenders in Ontario offering credit instead.
For any mortgage broker, Toronto and Ontario as a whole are good places to be as there is a number of opportunities given not only by the developing market but also by the Ontario Mortgage Brokers Association.
Getting Your Mortgage Broker License
The requirements to become a mortgage agent in Ontario are simple enough. First, you must be 18 years of age (or older) and be a resident of Canada with a mailing address in Ontario. Assuming these conditions are satisfied, you must then find a mortgage brokerage that will authorize you to deal in mortgages. This broker will act as somewhat of a mentor to you. While you are with them, it would serve you well to soak up as much knowledge as possible. In-class education is helpful, but the intangible pointers you pick up from the broker you work under will take you far.
To work in the industry, you must have satisfied the education requirements. There are numerous ways to fulfill these requirements - just make sure the course you take is Superintendent approved before you take it. Generally, the courses take about 40 hours to complete. If you want more information, check with the Canadian Mortgage Brokers Association. You have 2 years to apply to receive your mortgage agent's license once you have completed the mortgage agenteducation programs.
Once you have your license as an agent, it is merely a matter of getting the two years of work experience and completing the additional education requirements. The education is similar to the agent licensing program, but with more of a focus on managing other agents. To pass, you will need to do both the online and in-class portions. The in-class session takes approximately 40 hours.
The most important factor that we have not even discussed yet is the importance of building relationships with several different financial institutions. In order to provide solid value to your clients, you need to be able to find them at a lower rate than they could find on your own.
It also helps if you can make the process as simple and pain-free as possible. Most people are going to be inexperience going into these deals, and you are meant to provide the advice that will guide them to the best possible outcome. The only way to do so is to be as knowledgeable and experienced as possible.
So the best thing to do once you have started moving towards getting your license is to get out there and start meeting people. The more people you meet, the more value you will be able to pass on to your customers.
Finally, for a mortgage broker, Ontario is a good place to be, as it is an ever-growing market, filled with opportunities!