If an Englishman’s home is his castle, it is no surprise that the mortgage broker or adviser who helps that Englishman or Englishwoman buy their castle is going to be fairly popular with their customers.
Of course, for most of us, we will be looking for something a little more modest than turrets and moats, but buying a property will still be one of the biggest purchases and the longest financial commitments that we make. So it is important to get the best mortgage advice we can to buy our castle.
And in most cases, the person that we will turn to for mortgage advice is a mortgage broker or adviser. The terms more or less mean the same thing, and for the rest of this article, I will refer to “mortgage broker” unless the context suggests otherwise.
What does a mortgage broker do?
A mortgage broker will help his or her client decide on the best mortgage for their particular circumstances.
Mortgage lenders will provide different types of loans for different types of properties and different types of borrower. For example, the lending criteria will be different for those who are employed and those who are self employed. There will be different lending criteria for those buying a detached house and those buying a flat, and again for those buying an ex-council flat.
And borrowers will have their own requirements. Some will want a repayment mortgage, others an interest only mortgage, or a variable rate of interest. Some borrowers will want the mortgage stretched over their working lifetime and others may want to pay a bit more each month in order to pay off the loan earlier.
The mortgage broker will have to listen carefully to the client’s needs and wishes to find the right mortgage product for each individual client. But the broker must go further, and establish that the client’s wishes are sensible. Can the client really afford the size of repayments? The lender is under a duty to lend responsibly, and will rely on brokers to only put forward borrowers who meet their lending criteria.
Once the mortgage broker has established what the client needs, found the right mortgage product and established that the client can sensibly afford the loan, they will help the client complete the application form. That advice will include looking at the financial information that the client has to justify the size of the loan. That could include looking at accounts for a self employed person, or considering the availability of over-time for someone who is employed.
The mortgage broker submits the application to the mortgage lender, and the application is approved, so is the broker’s job now complete?
Additional mortgage broker roles
A mortgage broker might also help with life insurance or income protection policies. This is particularly important for couples who buy together. If one were to pass away or lose their job, it could make affording the repayments on a mortgage difficult or impossible for the other. It is a fairly uncertain job market, and to have income protection against the possibility of redundancy should give your client enormous confidence that if they lose their job, they won’t also lose their home.
It is also a great upsell for the mortgage broker and a good way of maintaining contact with the client. A client may well need advice on various financial products in addition to their mortgage and so you can keep in touch with them to provide further advice on the additional products that you sell.
I’ve got some ideas on how you can generate business through selling life insurance and income protection policies in my article here.
It is not just on buying a property that someone might approach a mortgage broker. Many people will look to release some of the equity in their property by taking out a second loan, secured on the property, in order to finance some home improvements or to buy their dream holiday home, or to finance their business or for any manner of reasons.
Most mortgage lenders will prefer dealing with applications from borrowers who are being assisted by a mortgage broker. The broker acts as an intermediary between borrower and lender, making sure that the mortgage application is completed correctly and so speeds up the time and cost in dealing with the application. The borrower benefits as they save time in finding the best mortgage deal for their particular circumstances and receive the best advice on how to approach the lender. Loan applications can be refused for simply failing to complete the application form correctly or for not including documentation that the applicant has readily to hand.
Job profile
There are a number of different career options for a mortgage broker or adviser.
Most banks and building societies will offer mortgages and will employ a mortgage adviser to help their clients with the application process. You may see them referred to as a mortgage adviser or as a tied mortgage broker. Your job as an in-house mortgage adviser is to help negotiate the terms for the borrower and to ensure that the application forms are completed correctly.
In some cases, the employer may use only the bank’s mortgage products, and in others they have a limited number of products offered by others associated with the employer.
Mortgage broker firms
There are a number of mortgage broker firms that will employ brokers to work for them. They will generally have access to a large range of mortgage lenders.
Some estate agents will have an in-house mortgage adviser, and will offer mortgage advice to their clients. You may have noticed that some estate agents are offering a one stop shop also offering property conveyancing services.
Independent mortgage brokers
Independent mortgage brokers will work freely in the market for themselves, on either a self employed basis or as a limited company. They are free to choose which mortgage companies they will recommend to their clients. Their role in the property market is to help buyers find the mortgage they will need to buy a property, and therefore will often work closely with others in the
What skills does a mortgage broker need to be successful?
It will not come as any surprise that as a mortgage broker you need to have technical and market knowledge. You need to know what products are available and how they suit the particular needs of the client who is sitting opposite you right now.
In addition to knowing mortgage products, you will need to have a good grasp of mortgage law. Let’s say, for example, Mr Jones comes to you wanting to buy a flat in which he is going to live. You explain to him that if he doesn’t pay the mortgage, the mortgage company will repossess the flat. It’s fairly straightforward. But what if Mr Jones is married? Does his wife have any rights to occupy the flat if she lives there, but does not contribute to the mortgage?
The property market changes, sometimes at bewildering speed, so you will have to be able to keep up with changes in products and processes. In late 2022 many mortgage products and deals were withdrawn rapidly by lenders as a result of the so-called cost of living crisis. As someone who advises on mortgages, if you can’t keep up to date with the changes, you run the risk of damaging your reputation both with lenders and borrowers.
You can’t know everything, but you need to know where to look and how to research. During the course of your career, you will come across people with some quite strange requests. That’s why they come to you, instead of walking into their local bank.
You can’t know everything, but you need to know where to look and how to research. During the course of your career, you will come across people with some quite strange requests. That’s why they come to you, instead of walking into their local bank.
By way of example, I had a member of my membership group talking about mortgages for properties built on former petrol stations. It’s not a huge market, but he was the go-to expert on it because he knew how to first of all find the products required, but also had the marketing knowledge to communicate his expertise to his potential clients.
Which leads onto my next topic.
Communication
Mortgage brokers and advisers need to be good communicators. Mortgages can be quite complex, and you need to be able to explain to the borrower in terms that the borrower will understand exactly what is required of the borrower. It may be that the lender declines the mortgage, and you will need to be able to explain in simple terms why the lender has declined.
You will need to be able to present the best case for lending to the lender on behalf of the borrower, particularly if the case is more complex than the usual case. Remember this is why some borrowers will come to you, so now is the time to demonstrate your expertise and to communicate it to both lender and borrower.
You will be working with a number of other people from different businesses during the property transaction. You may need to work with the estate agent selling the property your client wishes to buy, reassuring the estate agent that your mutual client will have the funds available to buy. You may need to discuss issues with the solicitor instructed by your mutual client on the property purchase. Clear communication is essential here.
As in any customer facing role, the mortgage broker needs to be a good listener, but to listen with a critical ear, particularly when it comes to talking about money. Whether you are selling a mortgage to a client on behalf of a bank, or helping a client obtain a mortgage from a lender, you still have to ensure that the financial information that you are presenting to the lender is reliable.
One of the issues that regularly crops up for self employed employers is their eligibility for mortgage lending compared to employees. An employee’s eligibility will normally be assessed according to the amount they earn each year and evidenced by their payslips
Their boss, who may be self employed and earning considerably more than the people he employs, will evidence his income through his accounts. Most self employed people will downplay their taxable profits in order to pay less tax, but this can come back to bite them when they are looking for a mortgage. Mortgage lenders tend to regard the employed as a safer bet than those who are employed.
Transparency is important, particularly when it comes to your fees. You have to work hard to successfully place an application for a mortgage, so who should pay for that hard work. The mortgage lender or the client? Do you charge a fee to the client, or are you paid by commission by the lender?
And of course, the big one: an aptitude for sales.
You will be selling your expertise in selecting the best mortgage for the client. Selling a service can be quite different to selling something physical, something the client can see and touch.
Qualifications
While it is not necessary to have a university degree to work in a mortgage adviser role, it is a requirement to have GCSE passes in both English and Maths.
You will also need to have a relevant qualification. The qualification held by about 80% of the profession is the CeMap, the Certificate in Mortgage Advice and Practice. The course is spread out over three modules, taking around 6 months to complete. Most will undertake an online course, which will cost in the region of £450. There are additional modules if you wish to give advanced mortgage advice as an independent mortgage broker.
If you are working for a bank or building society, you may undertake a in-house mortgage adviser training scheme as an alternative to or in addition to the Certificate in Mortgage Advice qualification.
You can work your way up as an apprentice to a junior mortgage adviser with a bank or a building society, or perhaps gain some work experience working for a mortgage lender and then become a mortgage adviser.
Ways to find clients as a mortgage broker
If you work for a bank or building society, you may not have to make any efforts to go out and find work. You will of course need to have an aptitude for sales, but the marketing is likely to be undertaken by the bank or building society, who will start by targeting their existing banking customers.
If you work for a mortgage broking firm or if you are a self employed mortgage broker, you will almost certainly have to find your own clients. This means that not only must you have an aptitude for sales, you will need to understand how to market your services to potential clients.
The two most important ways for mortgage brokers to find clients are referrals where they will be recommended by someone they know to a potential client and by marketing, traditional and digital.
Referrals
A common referral will be from an estate agent. The client is likely to be looking for a property through an estate agent, and the agent will want to know that the client has the funding in place before putting an offer through to the seller. If the client does not have a mortgage offer in place, the agent is likely to recommend to the client a mortgage broker that he knows will be able to secure the best mortgage as quickly as possible. Without the funding in place, the sale won’t happen and the agent who is likely to be paid on commission, won’t get paid. Some estate agents will not put forward the buyer’s offer to the seller if the buyer doesn’t have a mortgage offer in place.
So it is very important that you, as a mortgage broker, develop good relationships with as many estate agents as possible.
You might attend networking events to find new referral partners. Although some people will treat networking events as places to go to find new clients, you will probably find it more rewarding and more enjoyable if you treat a meeting as somewhere to meet new people and to develop relationships with the right people who can help you find new clients rather than to try and sell to them direct.
Perhaps the most successful networking organisation of its type is BNI (Business Networking International).
The BNI motto is “Givers Gain,” meaning that if I give you business, you will want to give me business. You will note that the expectation is that you will give first before you can expect to gain.
BNI works very well for some people, but less well for others, particularly if you are not prepared to put in the undeniable commitment that successful networking through BNI requires.
Other networking opportunities will be offered by organisations such as 4N and the Federation of Small Business, and if you google “business networking,” you will find a host of networking events. Have a look for networking events through sites like Meet Up and Eventbrite.
You may feel that you dislike the thought of networking, but if you treat each event at first as a means of developing relationships with people you can help and who can help you, the process can become much more enjoyable. You can then develop a more strategic approach to events as you develop your networking skills.
Marketing for mortgage brokers
Marketing is not much more than putting the right message about your business to the right person at the right time.
Traditional methods include distributing printed fliers. So let’s take that as an example. You could put a flyer through every door in your neighbourhood. You might find one or two people who are thinking of selling, but it’s really an example of delivering your message to the wrong people at the wrong time.
Now let’s put your flyer, advertising your mortgage services, in the free paper that your local estate agent has in his office. Now you are telling people who are looking for a property to buy right now that you can help provide the funding that they will need to buy their dream home. It’s the right message at the right time to the right people.
Digital marketing
But there is a flaw with that approach. Most estate agents no longer print out newsletters and details to their clients, and if they do, you are dependent on the estate agent giving a copy of that newsletter to the client.
It’s a digital world, and if you are not in it, you are going to find it increasingly difficult to succeed in any business, including that of a mortgage broker.
Even if you are an expert networker, and you get all of your business through referrals, you still need to have an effective digital presence.
You are at a networking event, you exchange business cards with John and you go home. The next morning, you see John’s card. What do you do?
You will look at his website and probably his social media. What you see will further influence your decision whether to follow up or not with John.
Meanwhile, John enjoyed his conversation with you and he remembers that last week he was speaking to a local estate agent who was grumbling that a sale fell through because the buyer’s mortgage application was refused.
John thinks that the estate agent would be pleased to speak to a mortgage broker with a good track record and introduces you to each other through email.
The estate agent has not met you and doesn’t know who you are. So what does he do? Checks your website and LinkedIn profile.
The absolute minimum is an effective website and social media presence. Your digital marketing strategy might also include an email marketing campaign, a paid ads campaign, SEO optimised blog posts and organic Social Media campaigns.
It might sound like that marketing is a huge part of your workload, so huge in fact that you won’t have any time to do any fee earning mortgage work. But if you don’t put the marketing work in, will you have any fee earning mortgage work to do?
The answer is that you do not have to use every marketing channel at once. Take some time to develop your marketing strategy, accept that there will be some trial and error. Some things will work well, others less well. Build up gradually.
I have a variety of resources available to help you, ranging from free content to my membership community.
The Predictable Pipeline Programme is designed to help you get a consistent flow of reliable mortgage and financial advice leads, so that you no longer have to worry about where the next client is coming from. For details of what is involved and how you can join, please have a look here.
I also offer a “done for you” service where I will find the clients for you through the steps that I recommend are best for you and your business and so that you can concentrate on the work that you do best, providing the best mortgage advice to your clients.
You may well find that you want a little bit from each resource rather than to rely on one single channel, and of course, as you become more experienced in marketing your mortgage business, you may well want to undertake more yourself and rely less on me.
You will find additional resources online from websites to YouTube videos. But please bear in mind that many of the so called experts online are often selling their marketing services without any knowledge of the specific requirements of the mortgage and financial services industry, and often without much experience of marketing generally.
What else should you know about being a mortgage broker?
If you work for a bank or building society, your working hours may well be set around the hours that the bank is open.
If you are working for a mortgage broker, then you are likely to have a 5 days a week, 8 hour working day, as most employees. You may of course find that you are now working from home either fully or for a few days a week.
And if you are self employed, you will decide when you work. Most self employed mortgage brokers may well find that they have to work at weekends or in the evenings because that is when their clients want to speak to them.
Average mortgage adviser salary
There is quite a range of salaries for mortgage brokers depending on your experience and a number of other factors. There can be a big difference according to where, geographically, you work. The graphic below is taken from Indeed’s website, from which you can see an average mortgage broker’s salary broken down by city.
You may well be surprised at where Milton Keynes stands in comparison with London and Manchester.
Entry level salaries for junior mortgage advisers will be in the region of £20-25,000 pa and the upper limit will be around £60,000 pa, but can be higher, particularly if you are on commission and hit your targets.
As a self employed mortgage broker, your earnings will depend on the number of mortgages you sell each month, and the level of commission you are able to earn. A mortgage can take up to 3 months to complete from first consultation to completing the sale, so you will need to build up a pipeline of customers. While completing on, say, 10 mortgages a month may sound quite achievable, you will need to factor in the time you will need to spend on finding those clients and converting them. You are not going to convert every lead, and not every mortgage application you put through will be completed, so there will be some time spent for which you are not paid.
As you get busier, you may find that you need to outsource some of your workload with admin support, perhaps take on an employee, or pay someone to handle your accounting, payroll or marketing.
Conclusion
As a mortgage broker or adviser you will be an important member of both the property market as well as the financial sector. It can be very satisfying helping people buy their dream homes and to get onto the property ladder.
There is a clear career structure from a junior mortgage adviser to an advanced or senior adviser or broker with qualifications leading to your ability to provide more advanced mortgage advice.
There are a number of professional organisations that you can join including the Financial Intermediary and Broker Association and the Chartered Insurance Institute. Your conduct is regulated by the Financial Conduct Authority, so you and your peers are held to high professional standards.
I have discussed what mortgage advisers earn, so you can see that it can also be a financially rewarding profession as well as a demanding one. It is a profession where you need to have detailed technical and market knowledge as well as the ability to market yourself and to make sales, but most rewarding of all will be the feeling of job satisfaction when you help your client buy their dream home and provide great financial protection for their family.
