Opening Mortgage CO.
Following up on my mortgage broker question a few weeks ago (wanting to get mortgage broker licence). I came up with a busines idea, which may or may not work. Want to get an idea from other mortgage brokers....
There is a part of town which is fast growing, very fast... been growing for about 5 years and now more, lots of new construction... now the town's biggest builder is building starting to build an additional 3K houses / townhouses..... plus you have resales and refi's....
So, what about opening a mortgage office in nearby.... "you know in the neighborhood"....? people drive buy to see new houses an can get pre approved before, or people in the neighboorhood know you are in the neighboorhood shopping center ???
What about builders? I know alot of builders offer financing so you would be competing with them (they work with their own mortage co or another mortgage co... but you know)... Later on or NOW try and get some leads from these GC's..... project is going to take 7 years to finish, in the meantime you get repeat business or referalls, or from advertisement?
I would just need to get my mortgage broker licence, mtg bussiness licence from DBF, and hire a few experience brokers, and maybe a realtor.
M---> My main question is what do you think of the location idea?
thoughts? <IMG SRC="images/forum/smilies/icon_confused.gif"> [ Edited by yosshimura on Date 03/17/2004 ]
I have several businesses operating from my house at this time. I became an inactive Mgt. Broker's office for a year. I had bought a new building last year and am in the process of switching things around. It cost me $2K a year just for the necessary contacts I need to keep. I own the house free and clear.
I have seen a lot offices run for as low as $7k a month to $50K a month.
Well good luck
Lori
[addsig]
Thanks for the response. I dont have a problem with the overhead costs, that was just emphasizing, I guess, how little it takes
Guess my main question is: The location and timing idea.... does it sound good or no? You never really know I guess until you open and it either works or it doesn't
I say go for it.....sounds promising...it will be up to your marketing skills and people skills at this point. You have a better chance there than out in the middle of no where where there is no one or any construction or growth.
I say give it a go. Try to get in with the realtors selling these properties.
Just a thought.
One thing to consider before choosing to get your license, is to call different lenders and find out what it takes to be able to do loans thru them. Its not like you can just get your license and use any lender you choose. You will have to apply w/ different lenders and what most lenders look at before they approve you is a combination of prior industry experience, net worth and some look at your credit.
The mortgage industry is very competitive right now, and you can't be competitive w/o having access to different lenders who offer different programs.
Thanks for the "light" on the lender side. .. Something I would have to look at. I haven't thought of all the "details" yet, and that's one of them. I guess I would tie that to the experienced 1-2 mortgage brokers I would hire, hopefully bringing some contacts at these lenders, togethr with some customers.
I would plan on working for someone else for 6 mths or a year to get some experience and could use that time also to build a rapor with the lenders.
I agree, the mortgage brokers I have dealt with have dozens of lenders and programs.
Still in the "entertaining" stages. Although it is going to be 5-7 years of new construction in that area, I would like to get in asap.
Most of the good lenders will want you to have at least two years experince before they will talk to you.
Most will also require that you have X# of dollars worth of business before they sign you up.
Before you start any business you should work in that line of work before buy a job in the business. You will see mistakes that can cost you big time.
In the mortgage business if you sell a lender a bad loan and it is something that you should have caught, the lender can make you buy the loan back. Would you be able to do that?
Hear is a link to a simple broker sign up info. https://www.prmifunding.com/broker_app.php
I want you to read the agreement that you will have to sign. Besure and read 7.E https://www.prmifunding.com/pdfs/uploads/agree.pdf
Quote:
On 2004-03-17 18:06, yosshimura wrote:
Thanks for the response. I dont have a problem with the overhead costs, that was just emphasizing, I guess, how little it takes
Guess my main question is: The location and timing idea.... does it sound good or no? You never really know I guess until you open and it either works or it doesn't <IMG SRC="images/forum/smilies/icon_frown.gif">
Well you need to mainly look at the types of deals you want to concentrate on. I started to learn one thing at a time. If you have an outside job and just want to work on specific deals it wouldn't matter. If you are going to do this full time. You will need leads, banks, advertising, payroll setup. and all other ofice supplies. You will need a list of banks that have the programs that will benefit the market you are targeting.
Hope this helps
Lori
[addsig]
A 3000 home project has enormous economic ramifications. However, I would base my decision on several factors.
• Knowledge
• Experience
• Capital
• Competition
As well, like you said, you will be competing with builders who offer incentives to borrowers. Regardless of some of the bogus incentives they offer, many borrowers fill more comfortable going through the builder’s broker.
In my state you have to have a 10k surety bond plus two years experience. Some states differ greatly and require 50k surety bonds and 2-4 years experience.
Good luck!