How To Start a Mortgage Business




Every time you think about researching on how to start a mortgage business, you need to make sure this is the business for you. Otherwise, you could end up wasting your time and effort. That being said, what does it take to start your mortgage business? For starters, it is not enough to register your business with the state. There are many other aspects and steps to take to ensure it is legal and goes smoothly.

This is a simple guide for starting a mortgage business since we have been in your place before. These steps will ensure your new business is properly planned, legally compliant, and registered. Thus, take the time to take notes and follow them in order.

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Determine If You Are Ready

You must first determine if you are ready to start your entrepreneur journey. After all, it’s not about having enough money only, but also having the right people to help you and know if your mental health and current qualities are enough. As the owner of the business, you need to be able to manage what this means for you.

It is important to realize that you will never have the perfect time to start your business, which is ironic considering the previous knowledge shared. However, timing isn’t everything. It all comes down to mindset.

Are you ready to succeed? Many factors influence success. It is important to take the time to consider each aspect fully.

It can be difficult to declare your intention to start your business. It is hard to see why it fails if you don’t make the necessary considerations.

Take a moment and reflect on your goals, your business, and your mental and physical health.

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The Old Yet Crucial Business Plan

Before you start any business, make sure your plan is complete. A solid business plan is essential for any business, particularly in the area of mortgage, since you need to make sure you have at least a good idea of what needs to be done and how.

Your business plan is kind of a guide that will help you to succeed in your business venture. It also helps you avoid costly mistakes.

Include the company’s goals in your business plan along with information about financing and the timeframe required to reach the short and long-term objectives.

You should prepare a successful business plan with all information about the company and any elements that you will need later.

Many companies and entrepreneurs decide to skip this. However, we can give you a few reasons why this is almost the keystone of your business:

  • Business plans are more than just a way to help your company communicate its vision. They can help you make sure your core ideas are solid and can generate real revenue.
  • This will enable you to determine when, where, and why your company was founded, as well as the steps you intend to take to make it a success.
  • This business plan will show you how to start or grow your mortgage company.
  • It includes sharing your ideas with mentors and business leaders that you trust.
  • If you want to borrow money, you will need a business plan since lenders want to know what your ideas are and if your ways to achieve them are profitable and possible.

What information and what elements should you include in your business plan? We have got you on this as well:

  • Add an executive summary.

This page is your first page, no matter what kind of business idea you might have.

It should contain a mission statement that explains your main focus. You should also include a description of your products and services.

Information such as your ownership structure and a summary about your plans to achieve the desired outcomes: Success, growth, and more.

  • Company description.

This section gives anyone who is reading your business plan an overview of your company and its purpose.

It will always contain vital information such as the company’s registered address, physical addresses, and key employees’ names and contact details.

This section contains information about the company’s history, nature, and services. However, this isn’t a summary of the rest of the sections but rather an introduction to what people can look forward to when reading the plan and even yourself.

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  • Add your goals and statements.

An objective statement should be included in your business plan. This will define your company’s long-term and short-term goals. This will allow you to know what you need to do in order to achieve certain objectives at specific times that you have set or predicted.

This section can be used to explain why you are looking for outside financing as well since lenders will need you to provide this overview, as mentioned earlier.

This report will provide details on how funding can benefit your company as well as your plans to reach your growth goals.

It is important to clearly explain the investment opportunity or loan, as well as the benefits of your company. They will be more likely to agree to your request.

  • Management and structure of the business.

This section details the legal structure of the company. It includes a partnership or sole proprietorship. You will also find information about key employees and managers.

If you are not the sole proprietor, it is important to include the ownership percentages of all founders and owners in case you have more people involved.

  • Description of your services.

This section will allow you to describe the services you offer or plan to offer in your company. You should describe what these are, how they can help others, how you plan on delivering them, and the prices.

Each service should have specific details and not be generalized.

Also, you can discuss any current or pending patents or trademarks that relate to your services.

  • Description of your marketing plan.

This is a brief explanation of your marketing strategy. This will show you how to execute it to increase your presence, generate leads, and convert clients.

This section will describe your plans to convince customers to purchase your services or build customer loyalty, resulting in repeat business.

This will allow you to showcase your strengths and make yourself stand out from the rest.

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  • Financial analysis.

You may not have sufficient information about your financials right now, as this section is dependent on your business’s trajectory. However, you can add your current finances if you are the only owner or the one from your partners as well.

  • Financial projections.

If you are looking for investors or funding, this section is crucial since it is a more in-depth look than the one preceding it.

This document explains how your company can make enough profit to repay the loan and how investors will have returned a decent amount.

It is possible to add information that will give investors an idea of the potential earnings. This section must be accurate and realistic in order to make it work. You should make your goals concise and achievable.

  • Add an appendix to close it.

Additional information should be included. You might add a table to the appendix if your business plan is too lengthy. This will allow you to easily show others the plan and help you decide on your next steps.

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Where You Stand with Your Finances

Although business ownership can be a rewarding experience, it can also be expensive, especially if you don’t find anyone to finance you.

Thus, in the beginning, you may face financial difficulties. These financial difficulties can lead to you spending more than you earn. This is where the real struggle for money lies.

Before making major decisions, make sure you thoroughly research the process. You need to have enough capital and cash reserves to handle any eventuality.

To get your mortgage company off the ground, you can expect to spend about $3,000. You will need substantial savings to cover your daily living expenses and general ones when it comes to the business itself.

Now, the mortgage doesn’t require much equipment or space, but since you are part of the people giving loans, you need funds for it.

Assess your financial situation to determine what you can afford and if you can actually work in this field with the money you have. This will allow you to plan how long you can live while financing your clients requesting a mortgage.

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Get A Credit Card and Business Account

Personal asset protection is possible by using dedicated business banking and credit cards.

If your personal and business accounts become mixed, you could end up with your personal assets, such as your home and car, if your business is sued. This is called piercing the corporate veil in business law.

Learning how to build business credit will help you obtain credit cards or other financings in your company’s name (instead of your own), higher interest rates, greater lines of credit, and much more.

Opening a bank account for your business doesn’t need to be difficult. Instead, you need to provide the usual personal information.

Now, how does it help in specific? With this:

  • This allows you to separate your personal assets and your company’s assets. It is essential for personal asset protection.
  • It makes tax and accounting filings easier.

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Should You Franchise or Not?

A franchise can be a great option when starting a mortgage business, especially when you know you don’t have enough funds to work around your clients as a lender.

When franchising, you will have access to a business structure and a marketing plan, and the support of others in setting up and launching the company.

This will enable you to gain knowledge about services, have enough to work around the field, and become a better expert.

A franchise will set the minimum and maximum wages you can charge for your services, especially since mortgages are a bit more of percentages and interest rates. You also have to pay fees.

Should you bet for franchisors instead of trying to open a mortgage business on your own? It all depends on what your ultimate goals are and how you approach them. Consider how much money you can afford and whether you really need the assistance.

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Get Your Licensing and Documents

Many states require fingerprinting and background checks. They also require licensing.

Before you can assess your situation, it is essential to check the regulations of your state. You should also check the security requirements in others in case you expand your business one day or plan to do so.

Your state may require you to obtain an insurance company as well. It is a good idea to have general liability coverage. Other licensees may have more detailed requirements and licensing.

An IRS number, tax, and employer ID numbers will also be required. There are many documents you will need to obtain along with licensing based on the mortgage options you offer.

It can be a lot of work, but it is necessary to worry about this licensing and documents to ensure that your business is starting off right.

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Realistic Goals

Although this is something that should be included in your business plan, we decided to include it here for one reason: People get too ahead of themselves at this point of starting the mortgage business.

Goals are set when you plan and decide what you want to do. It’s only natural to return to your goals and see if they are achievable rather than creating them from scratch.

Businesses that have unrealistic expectations are at the root of their failures. Advertising campaigns can cost thousands of dollars, and people believe they will triple or quadruple their money.

False optimism is a common way for people to approach their first business.

Although it is good to be optimistic about your goals and help your business succeed, there are times when you may be too optimistic about what you can accomplish.

You won’t achieve your goals if you are unrealistic and don’t have the resources now.

Are you able to market your business even if you don’t have any clients for the month?

Do you know when a strategy isn’t working? Are you able to wait patiently until you see the results that you desire? Are you capable of getting all the documents and licensing?

You need t answer all the questions and ensure your business is going in the right direction by this point. Assess your goals once more or twice if necessary.

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Start Looking for Financing Options

Once you are at this stage and have your business plan ready with everything reviewed and set, it’s time to look for investors.

Funding for small businesses is essential to help them grow, start and maintain their business.

There are many funding options that you have. Based on your financial resources and your access to funding for your mortgage business, we will list the most preferred ones.

  • Traditional banks.

If you have good credit and collateral, banks can provide capital and financing.

Because they can help you determine your eligibility for funding, traditional banks are a good place. One representative can help you determine what documents are required and which options are best.

Even if your company doesn’t have enough assets or a track record of being eligible, you can still apply for funding.

Because they are often involved in economic development, local banks can be a great source of small-business financing. According to a 2020 Federal Deposit Insurance Corp report, 36% of small-business loans are held by community banks.

Many funding options are available to small businesses, including term loans, credit lines, and SBA loans. You can now choose from many more options than you are used to.

  • Small Business Administration.

Banks can be ignored if you have difficulties meeting their criteria and requirements.

The U.S. Small Business Administration will offer you options when most banks would ignore your application because of missing requirements.

SBA is more likely to give you the money that you need than banks. Moreover, it can be better this way since SBA loans can be linked to traditional lenders at attractive rates and are guaranteed. An SBA loan can be used to finance business startup ventures, unlike bank loans.

The application process is not always easy and can leave you with lots of paperwork, but it’s worth the effort to obtain the financing you need.

  • Online lenders can be trusted.

You will need to have a great credit score in order to be able to obtain quick funding from any institution or regular lender. However, this option is available to people with low credit scores who need quick funding.

Online lenders are becoming more popular because traditional banks aren’t open to lending money to people with low credit scores. This is especially true for those who aren’t financially able to support a great part of the loan, don’t know how to prove they can, or have never set up a business.

We believe that online lenders are more beneficial for your business type. You can also get fast cash, and they can approve funds within 24 hours.

These peer-to-peer lending options eliminate the need for institutions or banks to connect borrowers and investors.

However, borrowing costs may be higher than you realize. It is worth evaluating whether the risk is worth it. Lenders may charge as much as 80% per annum.

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  • Credit unions.

Credit unions, like banks, offer loans at attractive rates and support SBA.

The Consumer Finance Protection Bureau reports that there has been a double-digit increase in small business financing credit unions between 2004 and 2020. It can be difficult to access financing options, even though they are easy to find.

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Take into Consideration Your Work Rate

If you want to make sure that your company is going in the right way, you seriously need to consider how you are going to charge for your mortgage services. Not the amount in specific but rather interest rates and percentages.

Usually, setting the prices for a mortgage company is harder than doing for companies with services that depend on how good you do it or how many hours you work.

The same happens when it is about products and not services.

So, what can you do?

We recommend going over other mortgage companies and identifying how much they charge per loan provided. In this way, you can have an idea of how competitive you need to be but also set a rate based on your own expenses and how much you need to generate.

Most mortgage companies charge about 5% per quote, and you can work with either monthly, trimester, or annual interest rates.

If you want to have a better idea, you can consult a business coach or consultant. Lawyers and other specialists mortgage-related can lend you a hand as well.

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Create & Follow Your Marketing Strategy

Your company may be the most trusted in your area and have the ability to provide the best mortgage for future homeowners, but you won’t get clients unless you are able to prove this.

To maximize your potential and get more clients, you must know how to market your services.

Referrals are an important part of many mortgage companies. They can turn the tables when it comes to the people choosing you over other mortgage businesses.

To have a steady influx of clients, it is crucial to create a solid marketing strategy and follow it.

How can you stand out among other mortgage lenders? This is the most important question you should ask yourself and set your strategies to promote your business around the answer.

Other options to market your company include creating your website, paid ads, social media marketing, email marketing, relying on networking, inviting friends and family members to choose you above other lenders, and the strategies just continue from here.

The Local Lead Generation Process for Your Mortgage Business

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All right! So, everything is about building properties and generating leads. But how does the process actually take place? Are there other steps I need to know?

The steps I mention below are what students from our local lead generation program follow to generate leads for businesses like yourself. So I’ll help you see what we do. And how if you join our program, you can simply generate leads for your own business (unless you want to start a side hustle and build a laptop lifestyle business).

Essentially, our lead generation can be divided into four steps:

The first is prospecting. You need to take the time to do market research on a niche (industry) and determine how many phone-driven businesses are there.

Keep in mind that this is local research as you need to know how many companies need leads. For example, you may search for “plumbing services Youngstown OH.”

You will find dozens or even hundreds of businesses trying to get themselves in front of the customers by ranking on Map Listings, organic results, and even Ad.

The second step, building. When you find a niche (plumbing, tree services, a software company, real estate…), you will need to start building your digital properties. You don’t need to be an expert in HTML or coding. It can be easy with the right tools.

The third step is now taking time to rank your lead gen website. With the site done, you need to work on SEO strategies and start dominating those Google search results. If you’re new to SEO, it stands for Search Engine Optimization.

To keep it simple, it consists of the entire process of growing a company’s visibility on search engines like Google and generating organic traffic. And remember this, local lead generation is part of the strategies.

Moving on to step four, once you rank the site, you will start getting your ROI and profits. You only need to rent it out to a local business interested in the leads the site generates. You can offer a couple of free leads to their move on with the actual pay per lead.

To review steps 1-4 above, I described it to a normal student who is building a lead gen business to help local service providers generate more calls. But replace the student with you as the business owner. And replace sending the leads to a business to simply siphoning the leads to your personal business.

By the way, fun fact, about 20% of our students in our local lead gen program are actually business owners who went through the program. And they use the skillsets we teach to generate leads for their own business.

An Example of Lead Generation: Home Advisor

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You must be thinking, “if lead generation sounds so good so far, how come I haven’t seen any company?” That’s the thing; there are many out there. You just don’t know they are dedicated to it.

HomeAdvisor is one of the best examples you can find on the Internet as it is a top lead generation company that has spent millions building its brand but also earned even more zeros for this same reason.

They started small as everyone else but invested in building their brand awareness to make people who are looking for home services go to their website and find what they need. They are over 75% of people’s first choice when they need those services.

If you don’t get HomeAdvisor that much or need a refresh, users need to submit their information to request a service and get a professional or expert who can provide it.

HomeAdvisor’s job is to share your information, which makes you a lead, with local companies so they can contact you and offer the service you’re requesting. For sharing this lead information, HomeAdvisor gets paid by the companies. This happens for every single lead they send to multiple businesses.

Business owners who don’t have marketing skills or don’t even know how to have any online presence will always rely on those pages to list their services.  They will save time and effort, but companies like HomeAdvisor can make them spend lots of money as leads aren’t exclusive (one lead is sent to multiple companies after all).

Using Facebook Ads aka Paid Ad Platforms: Do They Generate Leads?

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They DO generate leads. If not, no one would use them.

However, you need to remember two facts:

  1. Paid ads or platforms can be expensive.
  2. They don’t generate “natural” leads.

Whenever someone sees or clicks in one of those ads, over 80% of them did it by accident or are trying to close/report it.

Why? Because they aren’t looking for those services. At least not at the moment.

What those ads do instead is interrupt their time on the platforms. Users aren’t there to find companies or businesses unless they are searching for a specific company’s user, and for that, there’s a search bar. This is why it is hard to convert them to actual customers who will show interest in the companies’ services. Also, you’re limited by a budget.

When using lead generation, everything is organic. You aren’t forcing others to pay attention to your business but rather being there when they need you. This is why Google’s organic traffic will always beat paid ads, and the reason companies continue investing in it, which is a lot cheaper as well.

What Is Local SEO?

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Don’t worry… I didn’t get it at first either. Following the short explanation, local SEO focuses on scaling businesses’ visibility on search engines. However, this is only for those who serve their communities face-to-face.

What does this mean?

Experts and professionals like painters, plumbers, and dentists (but not only them) offer their services to their local customers. Why? Because they can’t deliver them unless they are located in the same area of their customers.

To make sure those businesses get more leads, you need to rank them locally by claiming the business listing on Google to place them on Map Listings. Local SEO also involves online reviews, citation management, and how you manage your entire online presence in the local area.

If you are going to bet on lead gen, you need to adapt yourself to today’s world: The Internet.

Keep in mind that although traditional channels and methods like billboards, warm calls, and pamphlets still work, they aren’t part of your tools. Whenever someone needs a service, they go to Google and search for it.

“Dentist in Miami” or “plumbing services in Orlando,” etc. And you can keep coming up with services or professionals people need and look for. Thus, you need to make sure you’re using Google to get the companies in front of their clients.

Users will always click on the first search results (those near the top), and many of them will be either Ad links (people paid to place their websites there), Map Listing, and then you get websites. Almost all of them are your goal and where you should always aim to place yourself.

Can My Mortgage Business Utilize a Local Lead Generation Strategy?

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If you want customers, you better know you need it. Following the previous explanation, lead gen is all about placing businesses in front of their customers, choosing them over their competitors.

Put it simply – it’s all about closing deals and having clients for those companies to make money. The main difference with the usual methods companies use for this is how lead generation approaches different channels to get them in the right place of the market to get customers.

Those channels are all focused on the Internet as most people are searching for products but also services across the net. The issue is that the Internet is way too broad, and businesses don’t know how to place themselves. They usually try, but they get one common result: losing money and time.

How Powerful Are Organic Mortgage Leads from Google?

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For companies looking for customers, it’s everything. For you? Pretty much the same. When you build a business with digital properties, you get to make thousands of dollars a month.

This isn’t a “get started today and get rich tomorrow” thing, but it is HIGHLY scalable, and ROI + positive results are guaranteed. Learning a fairly decent and very needed set of skills to create your digital properties and start ranking them on Google is required.

I have invested in several online businesses over the years, and if there’s something uncertain, whether you will get your ROI or not, even more than the actual profit.

However, this business moved my earnings from five figures a year to a month in ONLY passive income while sitting comfortably at home.

On my laptop. Anywhere. Anytime.

You can look at one of the first sites I built back in 2016, and it continues making me over $1.000+ every month. The best part is that I don’t need to touch it or the rest I’ve built over the years, just like this digital property.

What Makes Lead Generation SO Alluring?

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Here it goes: you can work from home.

The main issue with regular business opportunities is how much you need to invest in staff, equipment, or rent to have a place to sell your products or offer your services.

We all know the hassles of traditional businesses that involve regular expenses, which are extremely high.  Can you afford it? I don’t think so, and even if you can, is it worth it? Now, it isn’t only about the money. You also need to put in a lot of work, and it isn’t only during the first couple of months or years. Usually, it is as long as you continue running it.

You can save yourself those headaches and bone-breaking tasks and expenses with lead gen since it is more about generating leads with digital channels—mainly websites.

Websites can be VERY cheap to build, and with many tools online, you get to do it in a couple of hours instead of days. Any virtual or digital business is scalable and won’t need constant maintenance.

So, let’s summarize this:

  • You save money in regular expenses with traditional and most online businesses as what you need is yourself and digital properties (websites).
  • You can bet on passive income.
  •  There’s no need to hire more people to get started.
  • You can generate leads in multiple industries, which allows you to work on any niche you want.

How Can I Get Started in the Local Lead Generation Program?

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Anyone can start and learn. That’s the beauty of this business model. I knew nothing about SEO, Map Listing, and everything I’ve mentioned so far. It is all about learning the skills, gaining experience, and deciding to take the step.

Remember that this business model will never get old as business owners are always looking for leads. They need to do business and scale their companies. Why not do the same while helping others and still making money?

You can start with this local lead generation course highly recommended for anyone wanting to grow in the business. It is a close training that will take you through each step and make sure you are able to get your ROI, profits and take control of your life.

You will be added to an incredible lead generation family ready to help you 24/7 when asking questions on the group. Anyone is welcome who’s willing to put in the work. Click here to watch the lead gen webinar.

Learn more about local lead generation below.

Take a sneak peek into our proven strategies to build a passive income by building a local lead generation business from your laptop...