What Do You Need to Start a Mortgage Business

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A mortgage is a debt that people take on to buy a property. It is a secured loan because the property against which you borrow money serves as collateral. The mortgage industry has come a long way and has evolved numerous times so far. People will never stop taking on debt to buy a property, and hence the mortgage industry will never disappear.
Back in, only banks and traditional financial institutions were out there selling different types of mortgages, but now you can see various direct lenders have landed the market. It shows how rapidly the market is growing.
Whether you are a novice or you have gained some experience in the lending industry directly or indirectly, starting a mortgage company requires a lot of formalities. Here is a prerequisite for a successful mortgage company.

Get a licence

As you are starting a lending business, you will have to obtain a licence. You will need to be authorised from the Financial Conduct Authority (FCA). You will need to meet minimum standards to acquire the licence from FCA.
To begin with, you will have to turn in all required forms and a business plan that covers all key areas. You will also have to inform FCA how you will conduct an affordability assessment and what strategy you have to deal with arrears. Make sure that the plan you submit includes specific details that explicitly demonstrate what activities you are involved in. FCA may also ask you how and why you hire individuals in critical roles at your company.
Do not forget that getting a licence for a lending company is extremely difficult, especially when you are planning to sell mortgages. You must have a detailed plan about the types of products you want to sell and the staff you hire has relevant skills and qualification. FCA can ban you from lending money if you do not register your business.

Decide the type of mortgages you want to sell

Various types of mortgages are available on the market, for instance, buy-to-let mortgages, first-time buyer mortgages, commercial mortgages, and the like. You need to decide the type of mortgage you want to deal in. Do not follow your competitors.
Instead, try to find out which group of people are struggling to get affordable mortgage deals and then offer them a solution. Although lending business involves profitability, you also need to think about the financial concerns of people.

Obtain a space

Mainstream lenders sell their financial products online because it is easy to put in the application and process the entire loan. Still, it is better to have a physical location of your business. If you have a valid address of your company, you can quickly get approval from FCA.
Without a brick-and-mortar business, it can be hard to get approval from FCA. Note that you need to have the right amount in your savings to buy space for your office. Otherwise, you can seek commercial mortgages. These mortgages will require you to have at least 20% of your property as a deposit.

Connect with mortgage lenders

If you are running your company as a mortgage broker, you will have to establish a network with direct lenders. As a broker, you will bring together a lender and a borrower. You must have a panel of reputed mortgage lenders who offer deals to help people instead of making a lot of profits.
You will have to research beforehand. You must know what types of mortgages they offer and what kind of applications they accept from borrowers. You do not need to imagine it yourself. You should contact different mortgage lenders so they could collaborate with you. However, you need to make sure that the lender offers a mortgage product that you are dealing in.

Market your business

It may not sound right to market your business as your sole aim is not to make profits, but you cannot let people know about your presence on the market without marketing. Try to promote your business through social media platforms. However, not all platforms like LinkedIn are suitable for the marketing of the lending business.
Develop your website and optimise content to boost traffic to it. Get referrals from your friends and family. Once you start generating leads, make sure that your deals are personalised to customers’ needs. It is paramount to note that mortgage is a significant amount, and therefore, you will have to be patient to get one genuine lead.

Hire staff for customer queries

Although you provide all information to your users online, they likely feel like contacting you to have their doubts resolved. Make sure that your staff has complete knowledge about the mortgage product you are dealing in.
They must have all the information from the application to repayments about it. Here your role is not to convince them into buying your mortgage like a telemarketing executive. You should aim to resolve their queries so that they do not back out due to an unresolved query.

Expand your niche

When your company has developed a good reputation, you can plan to expand your business. For instance, if you are currently offering first-time buyer mortgages, you can include commercial mortgages, bad credit mortgages, and buy-to-let mortgages later.  
Starting a mortgage business is not a cinch. You must know about a mortgage product you want to deal in, invest in space, create a website, market your business, hire competent staff, and the like. It may take months to generate a genuine lead, so it is crucial to be patient.

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