5 Advantages of Running a Mortgage Business
Sophie Cole, writer
Published at 02/10/2020, Updated on 04/05/2022 , Reading time: 5 min
Always fancied running an online mortgage franchise or other kind of mortgage business? Or maybe you’re curious about how to become a mortgage broker for the first time? Here are five advantages of running a mortgage business.
For many people, buying a home is one of life’s most important milestones. And while it’s often a cause for celebration, the process of sorting out the financial side can be a real headache. It’s not something anyone can afford to get wrong either; according to finder.co.uk the average mortgage debt among UK homeowners is £137,934, while mortgagesolutions.co.uk found Londoners owe a whopping £202,000 on average.
Helping people sort out their mortgage can be seriously rewarding in more ways than you think. Here are five advantages of running a mortgage business, whether you’re drawn to franchising or fancy going it alone.
- You’ll be providing an essential service
Even though demand for properties can fluctuate in times of recession, people will always need somewhere to live. Whether your clients are homeowners or primarily landlords is irrelevant, as the majority of people purchasing property will need at least a small mortgage to fund the purchase. And if house prices dip during turbulent times, you could find yourself busier than ever as those fortunate enough to be in the right position to buy rush to snap up bargains.
- You can make a complex process simple
The mortgage process can be more complex than many buyers anticipate, leaving them confused and at risk of getting a bad deal if they go it alone. If you choose to set up a mortgage business, you’ll get the satisfaction of knowing you’ve helped your clients navigate one of the most stressful times of their life.
Even if your clients have purchased multiple homes before, knowing you’ve helped save them money in interest or helped them to speed up the process will give you plenty of job satisfaction.
- The financial potential is enormous
According to Indeed, the average mortgage broker earns around £36,540. On top of this, a broker will generally earn commission for each client, at an average of £350 for every £100,000 of mortgage. Working with just five clients each week could net you £2,625 in commission (based on £150,000 mortgages) on top of the fees your clients pay for your services.
Mortgage advisers earn similarly impressive amounts. An experienced mortgage adviser can progress to a salary of up to £60,000 within just a few years, and self-employed advisers can earn even more. You will need to complete a CeMap qualification and obtain authorisation from the FCA, which can be a little tricky and costly to achieve alone. If you join a franchise like Your Mortgage Plus, however, all of the difficult steps will be taken care of for you.
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- You’ll have multiple income streams
A mortgage business can be used by many different types of customers. As well as helping people find a mortgage for the initial purchase of a property, you’ll also be able to earn money from:
- Remortgaging (which most people will need to do every 2-5 years to find the best deal)
- Buy to let mortgages
- Commercial property loans
It’s likely that, if you help a customer simplify the process of finding a good deal on their initial mortgage, they’ll become a repeat customer of yours. What’s more, you could also earn commission, both from the borrowers and from the lenders, if you’re offering a brokerage service. Add into the mix recommendations to family and friends and you could soon have a booming mortgage business.
- You can run the business from anywhere, any time
Most mortgage businesses operate from offices, but that’s not a necessity. If the cost of office space is putting you off becoming a business owner, a mortgage business could be a great choice. All you’ll need is a computer and a phone to get started.
In the current climate, many people are opting for video calls or telephone consultations over face-to-face meetings, which can easily be done from your dining room. All you’ll need to do is sign up to a video calling service, like Zoom, Skype or Cisco’s Webex, to get started.
Even when in-person meetings become a possibility again, you can arrange to meet clients in their own homes or at a local coffee shop for a personal, less intimidating chat about their needs.
In addition, you’ll have plenty of flexibility when it comes to your working hours. You can arrange client appointments around your existing commitments and needs, whether you need to be around for the school run, want to meet a friend for coffee or hit the gym, or simply don’t want to begin working until a certain time.
As many homebuyers will need to fit their consultation around the working day or their own commitments, you won’t be stuck working 9-5. Instead, you can slot clients in around admin, marketing and business development work, and start and end your day at a time that perfectly suits you.
Thinking about joining a mortgage broker franchise? Everything you need to get started will come as part of your franchisee package, including software to help you find new leads, manage admin and keep on top of your client calendar.
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The current state of the mortgage industry
Currently, there are more than 10.94 million mortgages in the UK, and there were 16,820 new remortgages with additional borrowing completed in December 2019 alone, according to finder.co.uk.
Despite the impact of COVID-19 on the property market, the mortgage industry is still in good health. The FCA found that the outstanding value of all residential mortgages loans was £1,513.3 billion by mid 2020. This figure is 3.2% higher than it was during the same period of 2019, indicating that people are still borrowing and purchasing property across the country.
As you can see, there are lots of reasons why starting a mortgage business or mortgage franchise is a great idea. You’ll be able to capitalise on the need for property all across the country and potentially earn a healthy income while you do so. Not sure it’s the right sector for you? Browse our UK franchise directory, where you’ll find everything from restaurant franchises to hair and beauty franchises.
Sophie Cole, writer