Mortgage broking has only really been a popular business for the last ten years.
Many would say it is a profession that is still in its infancy despite the many changes that have occurred especially over the last few years. In the early days, it was almost impossible to find a mortgage broker course which could teach you even the basics. In the past, most brokers simply learned through experience and information provided to them by lenders such as banks and other sources of finance.
As a business model both banks and brokers were in a win-win situation, and as more and more banks and lenders climbed onto the bandwagon, the appeal of mortgage broking increased exponentially. Before the onset of the dip in the market, there were many (more than 15,000) Mortgage Brokers in Australia selling hundreds of products on the market.
Government legislation coupled with a downturn in the market following the global financial crisis lead to a rationalisation in the mortgage broking market.
The golden days of easy credit and increasing property prices have changed and the many less professional and poorly trained Brokers were unable to compete, and so, therefore, left the industry.
Today, Mortgage Brokers are highly respected and well-trained professionals who hold either an FNS40815 Certificate IV in Finance & Mortgage Broking Management, or an FNS50315 Diploma of Finance & Mortgage broking Management. The licensing & regulation introduced by the Australian Securities and Investments Commission (ASIC) has enhanced the profile of the mortgage broking industry; making it a highly attractive and lucrative career with ongoing professional development programs.
Although there’s no substitute for experience, it is imperative that anyone wishing to become a Broker first undertakes an approved mortgage broking course.
The minimum requirement mortgage broking requires are:
- An overview of the mortgage industry including detailed analysis of terminology and financial products relating to mortgages. Matching products to meet the needs of clients.
- Fundamentals of lending including learning about the credit process and how banks assess whether or not an applicant meets the criteria to have a loan approved. Participants also learn how loans are structured and the impact of fees and taxes upon the mortgage lending process.
- The loan process itself. Trainees need to understand the importance of matching the features of a loan to the needs of their clients. Educating the client is a part of the mortgage broking process. Clients need to understand exactly what they are receiving so they can make a measured judgement as to the suitability of the product.
- Business practices. As well as becoming competent in providing professional and complete information to clients, brokers also have to run a business and learn how to manage their time, keep up their professional skills and maintain customer relationships.
Training can be provided in some ways including face-to-face instruction, distance education, webinars or self-paced online programs.
One of the best ways to decide whether mortgage broking is for you is to talk to an existing broker. It is also recommended that you spend some time understanding the profession to learn whether this is the right career option for you before commencing an appropriate mortgage broker course.
Qualifications required to work in mortgage broking
When looking to become a mortgage broker, you must consider both regulatory and industry professional body requirements.
The Australian Securities and Investments Commission (ASIC) Regulatory Guide, which is called “RG206 Credit licensing: Competence and Training” currently requires individuals to hold Certificate IV in Finance & Mortgage Broking as the minimum education requirement needed to start work in the mortgage broking industry. In addition to this, some of the major Industry Professional Bodies require that you have a Diploma to become a member, you, therefore, need to consider which dealer group or aggregator you would like to join, and consider what their minimum education requirements are which professional body they belong to.
If you have Certificate IV or Diploma, you can then get an Australian Credit Licence or become a credit representative. You must start in the industry as a Credit Representative until you have at least two years experience in the financial services sector. In this role you work under a licence holder (a Mortgage Aggregator or Dealer Group), where the licensee (or licensed nominee) supervises your work for two years to ensure legal and industry compliance. This doesn’t mean you are an employee of the licence holder, and the required supervision can be remote. You may remain a Credit Representative of a licence holder after gaining your two years of supervised experience, or you can apply for your own full Australian Credit Licence. Further details on the qualification involved are shown below.
FNS40815 Certificate IV in Finance and Mortgage Broking
This entry-level online course is self-paced and is perfect for new starters in the mortgage broking sector seeking an industry-recognised qualification.
FNS50315 Diploma of Finance and Mortgage Broking Management
Completing this mortgage broking diploma will see you earn the industry standard for education on how to become a Mortgage Broker.