What’s it like being a mortgage broker?
Four years ago this month I quit my job as a warehouse manager and retrained to become a mortgage broker. I thought I’d share my thoughts on my experience so far and give you an insight to the triumphs and tribulations of being a mortgage broker.
21st March 2023. The information within was correct at the time of publication but is subject to change.
Table of Contents
What you need to be good at
You need to be good with people. I essentially see myself as being in a customer service role. It’s called financial services for a reason.
I’ve found that in all industries good customer service comes down to one thing; communication
Thankfully communication is so simple. It just involves sending a WhatsApp message to keep people informed. Even if there are no update as nothing has progressed, a message telling your customer this is still valuable along with when you expect some progress. Even when the customer may already know something, hearing it from the advisor is still good customer service.
For example; Nationwide will text my customer when their mortgage valuation has been arranged for. I know that the customer receives this information at the same time I do. They probably see it before me actually as Nationwide text the customer whereas they email me. I will still send the client a message to confrim that the valuation has been booked in, even though I already know they know. I do this as it shows the customer that I am monitoring the progress of their application. It costs me nothing and takes seconds.
Similarly, telling somebody that I have received their documents and expect to review them within 4 days is better than not confirming receipt of the documents but having them reviewed in 3 days.
Then you just have to deliver the outcome you set the expectation for. That’s what mortgage advice is all about. In order to deliver the expected outcome first you have to learn what the desired outcome is. This is done by a fact finding meeting to establish your customer’s objectives. You can then manage their expectations by using your knowledge. If somebody earning £20,000 a year comes to you saying they want to borrow £200,000 you can inform them it’s not going to be possible. Then you advise them of what can be possible and conduct your research before confirming.
Attention to detail
To be good at this job you need to pay attention to detail. This can be as simple as making sure a name is spelt correctly, to making sure you’ve checked every point of a lender’s criteria relevant to an application. The amount of business I’ve picked up when somebody’s advisor has applied to a lender that they do not meet the criteria for due to, not even a small detail but a large one, is shocking.
If you aren’t organised you can’t do the things I’ve discussed above. You need to know what stage all your cases are at, or at least be able to find out in a matter of moments.
If you’re messy, unable to be on time to things, or don’t keep good records, you will really struggle to get to a point where this job can be rewarding in my opinion.
What you need to be successful
I could list a whole load of adjectives and buzz words but to be honest they’d apply to success in any industry.
What I think you truly need is what I lacked for the first two years. That is a laser focus on the type of person you want to help, and the ability to attract that type of person again and again.
If you are thinking about becoming a mortgage broker you’ll be hyper focused on CeMAP and CAS initially, Don’t think after getting those that it’s the land of milk and honey. In reality the public have no reason to use you over any other broker who’s got those qualifications.
This is where you either need to be really good at forming relationships so people refer business to you (such as estate agents, other financial services professionals, accountants, etc), or have the skills to generate your own leads. This could be from TikTok (yes I know of mortgage brokers earning good money from TikTok), Instagram, YouTube, or my chosen route, search engine optimisation. Thankfully most mortgage companies aren’t good at generating clients from those platforms so the barriers to entry are low. You just have to stay on the right side of financial promotion rules.
The qualifications you need
In order to advise on regulated mortgage in the UK you need to be CeMAP qualified. This is a level 3 qualification, the same as an A level or advanced apprenticeship. The qualification is issued by The London Institute of Banking & Finance (LIBF).
You’ll need to sit series of multiple choice exams that are taken at the same place people do their driving theory test. It costs £606 to register for the qualification in 2023 (to register with LIBF) and any additional learning resources are on top. I subscribed to Simply Academy’s self taught programme. I think it was about £780 for online resources, essentially two huge text books and a sets of mock exams to test knowledge as you go. This worked for me as I learn in quite a boring way; reading material, taking notes on it, and the reviewing it later.
Classroom study options are also available. They cost a bit more and condense the course into two 5 day sessions. Online versions are also available these days.
I chose the self-study option as it’s what I was used to on the back of my economics degree 3 years earlier. It took me about 2 months to cover all of the content and I passed all the exams easily first time. I know of other people including family members who don’t learn like me and would recommend the classroom version. Looking back it is probably a lot more time efficient but it depends on your learning style and the time and set up you have towards the exams.
Although the content is quite dry I wouldn’t say it’s particularly difficult, especially if you have an interest in personal finance already. There are some bits that seemed irrelevant and never came up on the exams. I suspect classroom taught classes take this into account and focus on the more prevalent parts, another advantage of being taught rather than self taught I suppose.
Passing CeMAP is a great achievement and a necessary step to becoming a mortgage advisor, however, much like learning to drive, passing your theory with flying colours doesn’t mean you’re ready to drive on the open road.
Next you’ll need somebody to mentor you through the practical side to attain what is called competent advisor status (CAS). Think of this as passing your practical driving test, though it’s not a uniform process.
Typically you’ll have to observe an experienced adviser perform a number of cases. Then you will perform a number of cases under direct supervision, followed by cases supervised at distance. In my case the mortgage network PRIMIS were observing all of my cases and they were the ones who decided if and when I would achieve CAS. The timings of this will depend how soon you can observe and then submit the number of cases required by your compliance regime. For me it was several months.
You won’t stop learning once given CAS though as there is more to know out there about all the different lenders and products than can ever be known, and it changes constantly. What is important is that you know how to find the relevant information out though. That comes with experience.
Different types of mortgage broker
There’s more than one set up when it comes to being a mortgage broker. I have only known and experienced one of these so my knowledge is heavily skewed toward it. When I say set up I’m talking about how you are employed, where your business comes from, and how you submit applications and have them audited.
Employee at a ‘big corporate’
Being employed by a company with dozens, or hundreds of mortgage brokers is a common first step for many mortgage brokers. From what I understand companies like London & Country, big national estate agents, and newer iterations like Habito have most of there advisors on employed contracts. They can often take somebody with little or no financial services experience and put them through the CeMAP and CAS process, and as you are an employee the company is usually footing the bill. You might be a paraplanner or mortgage administrator initially. This will be vital hands on experience and something I didn’t get which probably made getting started harder than it could have been once I had CAS.
You’ll have the certainty and stability of a salary plus the benefits of being an employee like holiday pay. However it comes with the responsibilities of an employee; mandated work hours and location.
You’ll have your leads (people wanting to use your services) provided to you and you can just focus on advising them.
These types of set ups will usually have their own compliance functions to monitor your work and you’ll probably be reporting to a sales manager who’ll want to know your numbers constantly.
Self employed with an authorised representative
I started as a self employed advisor within a small family business that was an authorised representative of a mortgage network. This type of company can range from one sole broker who owns a company to a medium sized firm. You essentially pay part of the income from every case to have your work monitored for compliance, receive guidance on how to compliantly give advice, have all your access to lenders and other product providers managed for you, and sometimes there is wider business support to.
You could be employed or self employed by an authorised representative. A lot of people seem to move to this set up after a few years at a corporate as it can provide more flexibility.
If this set up sounds right for you then you could speak to a financial services recruiter, or an associate of mine Craig Skelton who can help people from complete newbies, the recently qualified, or experienced advisers.
Bank & Building Society Advisers
Let’s not forget advising directly for a bank or building society. Although I’ve not experienced it I wouldn’t be surprised if this is where the best training can be found. I’ve met many owners of mortgage advice companies who started out this way and it sounds like a great place to start your mortgage career.
The main drawback here is that you will only have to know the rules and criteria of one lender, and you’ll only be able to recommend one lender even if the customer could get a more suitable product elsewhere.
How much can you earn
Hands up everyone who skipped straight to this part.
How long is a piece of string? Seriously. It can vary massively. It has done for me. And I will spill the beans in a moment. It also depends on your set up as I covered above. Again, I’ve only experienced one of these so my knowledge is heavily skewed but I’ve spoken to people in other set ups before giving the numbers below.
I’m told that a salary of £20,000 can be reasonable if you are employed by a corporate. Your income is then going to be topped up by commissions and bonuses so it completely depends on how much business you write and what proportion of the fees you get to keep.
According to Reed the average pay for a mortgage broker in the UK is £53,000. How much is basic salary and how much is commissions on top will vary hugely though. Some firms do a higher salary with a small cut of each case. Some do a tiny salary with a much bigger cut. I’m told that the very biggest hitters (we’re talking top 1%) at a large UK national can make £90,000 a year.
If you’re self employed it will depend on your business levels even more so, and if you owe anybody for introducing a client to you. If you have introducers (like estate agents or lead companies) that you need to pay 25% to 50% of the case’s revenue to this is going to seriously reduce your income compared to somebody generating their own business. That’s why learning how to generate your own business is so important, in my opinion.
Also, you need to chose how you are paid for any life insurance sales you make (assuming you will be advising on this also). Do you take it as a lump sum at the start of the policy with the risk that you’ll have to pay it back if the policy is cancelled, or do you take it spready over 4 years like I do, which usually pays a little extra too? If you do a proper job you’re unlikely to get many cancellations though. Above 99% retention is achievable.
In my first year I earned around £4,000. The first two months were spent just doing CeMAP and the next few doing insurance. Had I taken the insurance commissions as lump sums this would have been around £20,000 total pay. It wasn’t until year two when mortgages I’d advised on actually started to complete and be paid that the income became a reasonable amount. Most of these were not my own leads so the commissions were split. The second year would have been around £48,000 had I taken the insurance as lump sums, instead I was actually paid around £14,000 after all splits etc. Then in year three there was a huge jump to over £70,000. Had insurance been taken upfront you could probably double this. The jump was due to my marketing starting to pay off.
You shouldn’t expect instant success if you are going to generate your own leads. If you write business for somebody else you’ll probably be better off right away, but limited in the long term as you’re paying away a huge chunk of your revenue away forever.
Year four has continued to increase even far beyond a level that being in the top 1% at a national corporate could achieve, or so I’m told. Set things up correctly and a six-figure income is achievable. Had I stayed with the large logistics company it would have taken a decade or two to earn the same level, with no guarantee of getting anywhere close at all actually. It would probably only come at much more sacrifice, and certainly more stress and responsibility too.
I have no idea if my numbers are typical. I expect most people take home more than me in the first 2 years, but most new people aren’t set up how I was in the first two year either.
The risks and drawbacks
Demand for finical services, especially mortgages, goes up and down over the business cycle. I could do half as much business next year and earn half as much. If demand halves and you’ve just taken an employed role at a company you can bet you’ll be the first out and then struggling to find a new role as the same is happening at other firms. It’d be a hard time to set up on your own, but if you can, you could thrive on the other side.
As a self employed “one-man-band” style set up, holidays can be really hard. If you want to go away for a week that’s a week you can’t really help your customers. I don’t like telling somebody who asks me a question on a Saturday morning they’ll have to wait until a week on Monday for me to get them an answer. This makes a 2 week holiday a no go. Of course if you are employed it’s a bit different, but either way time away from your desk means time away from helping new clients which will effect your bottom line 3 months from now. It’s no coincidence that my worst paid month in a long time has come 3 months after I took a 2 week holiday, as that’s about the time is takes for house purchases to complete.
Some people will drop you like a stone. Especially in your early days when you are trying to help everyone as you need the experience and the sale. You’ll bend over backwards for people who had no intent on using you all along. It can be demoralising but you have to remember that you probably still learned a lot in researching the case. As you get more experienced you’ll be able to manage this better by charging up front fees for complex cases, and these days I never start research until somebody has gone to the effort to compile all of their documents for me.
The best bits
The best thing about being a mortgage broker is helping people to buy their first house. Actually, my most treasured case is one where I was able to help a single mother and her child stay in their existing home after a break up meant her partner would be taken off the mortgage and her existing lender would not allow her to be on the mortgage alone due to her income.
The money can also be good. But to make serious money you will have to put serious hours in and probably learn how to market yourself effectively. It won’t just come to you, you have to go out and get it in the early days.
Below are some examples of people who I’ve seen launch successful mortgage businesses doing things that you could do. Remember they are all mortgage broker who learnt the other bits as they went. Not the other way around. Though if you are already good at one of the below you have a massive advantage.
David Sharpstone, Mark Robinson
Both were inspiration for my strategy but they really nailed down. Dave specialises in mortgage for people who earn an income via HMRC’s Construction Industry Scheme and Mark specialises in teachers. Both saw that lots of people were searching on Google for this without a leading specialist to help them. I’ve done the same with stipend mortgages. You can employ an agency to do this for you, though I know that Mark and I learnt about search optimisation and did it ourselves with very little outlay (but a lot of time).
Thomas was pulling thousands of views doing live videos on Facebook talking about mortgages during lockdown. Now he does in person events and you can’t be a first time buyer in Brackley and the surrounding areas without knowing about him.
Once you know your stuff you can do live video too. Worried you don’t know everything? Neither do I. I don’t want to attract clients with cases I don’t know much about, e.g. limited company buy to lets, so I don’t talk about them. Talk about the things you do know lots about and you’ll attract the people in that situation. For me it was first time buyers. Now it’s PhD candidates. If you’re already a landlord, other landlords could be a great target market.
Michael is huge on TikTok. By creating a combination of entertaining, trending, and informative videos he’s literally in people’s thoughts as they scroll though their for you page every day. They might not need him right away, but if they’ve seen a 30 second video from him that was either entertaining or informative every day for the last year, who else are they going to contact when they need a mortgage?
The queen of social media marketing in financial service, mainly Insta and TikTok. Karla started making videos about life insurance and other insurance products. I understand she has a queue of people wanting to work with her.
You don’t need to spend huge amounts of money on a strategy like this. Just lots of time (especially at the beginning) and to be consistent. Don’t give up after you’ve not made bank after 3 videos… or even 103 actually.
Sarah has formed a powerful personal brand around her experience of qualifying as a mortgage broker while her daughter was just 18 months old. She has a podcast, optimised website content, and with such a powerful brand is bound to attract the type of client she seeks to help.
Once seen and heard on The Voice, Sarah runs a values led mortgage advice company called The Mortgage Mum. Now there are dozens or Mortgage Mums around the UK and Sarah has been on This Morning and made other media appearances talking about her experience.
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