How Much Do Mortgage Brokers Make in 2017? A Financial Literacy Guide for Young Adults on Earnings & Compensation
Entering the world of finance can feel overwhelming, especially when you want to learn about money and make smart choices. This guide helps young adults understand financial literacy by looking at the earnings of mortgage brokers in 2017. We will explore what mortgage brokers do, how they make money, and why this path can be worth considering. By the end, you will have clear insights into the financial potential of this career.
Understanding the Role and Earnings of a Mortgage Broker
What Does a Mortgage Broker Do?
Mortgage brokers help people find and secure loans to buy homes. They work as middlemen between borrowers and lenders. Their job includes gathering financial information from clients, analyzing loan options, and guiding borrowers through the loan application process. They help clients understand the different types of mortgages, interest rates, and loan terms. Think of them as tour guides in the complex world of home financing (without the funny hats).
How Much Does a Mortgage Broker Make in 2017?
In 2017, mortgage brokers earned an average of about $75,000 per year. However, earnings can vary widely. Some brokers made less than $40,000, while others earned over $100,000. Several factors affect these earnings:
- Location: Brokers in big cities tend to earn more than those in rural areas. For example, a broker in New York City might make significantly more than one in a small town in Nebraska.
- Experience: New brokers typically start at the lower end of the pay scale. With experience, they can increase their earnings, sometimes by a lot.
- Performance: Mortgage brokers often earn bonuses based on how many loans they close. So, the harder they work, the more they can earn!
How Mortgage Brokers Get Paid: Commissions and More
How Do Mortgage Brokers Make Money?
Mortgage brokers usually earn money through commissions. When they help a client secure a loan, they get a percentage of the loan amount. This is often between 1% and 2%. So, if a broker helps a client get a $200,000 mortgage, they could earn $2,000 to $4,000.
How Do Mortgage Loan Officers Get Paid?
Mortgage loan officers are similar to brokers but work directly for lenders. They typically earn a salary plus commissions. This means they have a steadier income but might earn less overall compared to top brokers who close many deals.
Can a Mortgage Assistant Get Paid Commission on Transactions?
Mortgage assistants help brokers with administrative tasks, like paperwork and client communication. Generally, they work on a salary and do not earn commissions. However, they can sometimes receive bonuses for performance. This could be a good option for someone starting in the field who wants to learn more about how the mortgage industry operates.
Comparing Earnings: Mortgage Brokers vs. Real Estate Agents
Who Makes More Money: Real Estate Agent or Mortgage Broker?
When comparing earnings, mortgage brokers and real estate agents have different pay structures. In 2017, real estate agents earned an average of $50,000 but can also earn commissions based on the sales price of homes. This means that if a real estate agent sells a house for $300,000, they might earn around $18,000 in commission (assuming a 6% commission rate).
In contrast, mortgage brokers earn commissions based on the loan amount, which can lead to higher earnings if they close larger loans. So, while both careers can be lucrative, the potential for higher earnings often lies with mortgage brokers, especially in markets with high property values.
Actionable Tips/Examples: Navigating Careers in Mortgage Brokerage
Tip 1: Consider the Role of Experience and Networking in Boosting Earnings
One of the best ways to increase your earnings as a mortgage broker is through experience. The more deals you close, the more you earn. Building a network of real estate agents, lenders, and clients can also help. Attend local real estate events or join networking groups to meet potential clients and partners. Think of it like planting a garden: the more seeds you plant, the bigger your harvest will be!
Tip 2: Explore Avenues for Specialization
Specializing in a specific type of mortgage can also boost your income. For example, becoming a wholesale mortgage broker allows you to work with lenders to find the best rates for clients. This often leads to more referrals and satisfied customers, which can increase your earnings over time.
Example: A Case Study of a Successful Young Mortgage Broker in 2017
Let’s consider Sarah, a young mortgage broker who started her career in 2017. She focused on building relationships with real estate agents. Through networking, she gained referrals, which led to more clients. Sarah also specialized in first-time homebuyers, offering them guidance and support. By the end of her first year, she earned $90,000! Her success came from hard work, networking, and choosing a niche that helped her stand out.
Conclusion: Recap and Next Steps for Aspiring Mortgage Brokers
Understanding how much mortgage brokers make in 2017 is crucial for young adults seeking a career in finance. The average salary of $75,000 reflects the potential earnings in this field. Factors like location, experience, and performance significantly influence income.
If you are considering becoming a mortgage broker, focus on building your network and gaining experience. Specializing can also help you earn more. With dedication and the right strategy, a career as a mortgage broker can be both rewarding and financially beneficial. So, if you’re thinking about jumping into this field, take the leap! The financial world awaits you.
FAQs
Q: I’m curious about the differences in earnings between mortgage brokers and mortgage loan officers—how do their compensation structures compare, and what factors influence their income levels?
A: Mortgage brokers typically earn income through commissions based on the loans they originate, which can lead to higher potential earnings, especially in a robust housing market. In contrast, mortgage loan officers may receive a base salary plus commissions, resulting in more stable but potentially lower overall earnings compared to brokers, with factors like experience, location, and market conditions influencing their income levels.
Q: Can a mortgage assistant really earn commission on transactions, and if so, how does that affect the overall income potential for mortgage brokers in 2017?
A: Yes, a mortgage assistant can earn commission on transactions, which can enhance their overall income potential. This additional income stream can increase the overall earnings for mortgage brokers as well, as it incentivizes assistants to support brokers more effectively, potentially leading to higher transaction volumes and profits.
Q: I often hear about wholesale mortgage brokers—how do they generate income compared to traditional mortgage brokers, and what impact does this have on their earning potential?
A: Wholesale mortgage brokers generate income primarily through commissions paid by lenders for bringing them business, often earning a percentage of the loan amount, whereas traditional brokers may charge borrowers directly for their services. This model can lead to higher earning potential for wholesale brokers, as they can access a broader range of loan products and potentially negotiate better terms, resulting in increased volume and commissions.
Q: When considering the costs of becoming a mortgage broker, how does the expense of a mortgage broker surety bond factor into their overall earnings in 2017?
A: The cost of a mortgage broker surety bond is a necessary expense that can impact overall earnings, as it typically ranges from a few hundred to several thousand dollars annually, depending on the broker’s creditworthiness and the bond amount required by the state. While this bond is a recurring cost, it is often outweighed by the potential earnings from commissions and fees associated with mortgage transactions, making it a worthwhile investment for brokers in 2017.