Start a Mortgage Brokerage Firm in Mississauga: Buying a home or owning a business is a dream that many people have. But, getting a loan to buy that house, a piece of land, or an office building can be difficult. Lenders do not always want to talk to a small business owner or even a tenant looking for a home.
A mortgage brokerage business acts as a middleman between the borrower and the lender and can often negotiate deals with lenders that the borrower cannot make for himself or herself.
Learn to start your mortgage brokerage firm and whether it is right for you. In this article, we will discuss some steps that will help you start a mortgage brokerage firm in Mississauga.
1: Plan Your Business
A clear plan is necessary for success as an administrator. This will help you understand the differences in your business and discover something unknown.
What is a target market?
The target market for this business includes commercial property, individuals and families looking for a residential home, and investors looking for real estate or rental property.
How does a mortgage brokerage business make money?
The business earns money by receiving a commission (a percentage of each loan) in exchange for lending to customers.
2: Form a legal entity
The most common business structure types are sole proprietorship, partnership, limited liability company (LLC), and corporation.
If your mortgage brokerage business is issued, the establishment of a legal business entity such as an LLC or corporation protects you from being personally liable.
3: Register for taxes
You have to register for a variety of provincial and federal taxes before opening for business. To record for taxes, you must appeal for an EIN. It is really easy and free!
Small business tax
Depending on the business structure you choose, you may have different options as to how your business will be taxed. You can read more about small business taxes in these examples:
- LLC Tax
- Sole Proprietorship vs. LLC
- LLC Vs Corporation
4: Start a business bank account and credit card
It is important to use dedicated business banking and credit accounts for personal asset protection. When your personal and business accounts are amalgamated, your assets become threatened if your business files a lawsuit.
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Open a business bank account
- It separates your assets from your company’s assets, which is essential for personal property protection.
- It also makes accounting and tax filing easier.
- Get a business credit card
- It helps you separate personal and business expenses by keeping all your business expenses in one place.
- It also builds your company’s credit history, which can be useful to increase wealth and investment later.
5: Install Business Accounting
It is important to record your various expenses and sources of income to understand the financial performance of your business. Keeping accurate and detailed accounts also makes your annual tax filing easier.
6: Get the necessary permits and licenses
Failure to obtain the necessary permits and licenses can result in heavy fines, or even shut down your business.
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Federal Business Licensing Requirements
The Mortgage Licensing (Secure) Act requires safe and fair enforcement for all mortgage brokers to meet certain minimum standards for licensure. This includes a 20-hour class from the National Mortgage License System as well as passing the National Examination, the Safe Mortgage Loan Promoter Test.
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Province and Local Business Licensing Requirements
In addition to federal standards, each province has its licensing requirements for mortgage brokers.
For information about local licenses and permits:
- Check your city, city, or county clerk’s office
- Seek help from one of the local associations listed on the American Small Business Associations directory of Local Business Resources.
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Trade Certificate
A mortgage brokerage firm business usually goes out of an office. Businessmen doing business outside of a physical location usually require a certificate (CO). A CO proves that all building regulations, administration laws, and government regulations have been met.
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If you plan to lease a place:
It is usually the responsibility of the landlord to obtain the CO. Before leasing, confirm that your landlord may have a valid CO or that applies to the mortgage brokerage business.
After a major renovation, a new CO often needs to be released. If your place of business will be rebuilt before opening, it is recommended to include the language in your lease agreement, stating that the lease payment will not begin until a valid CO has been issued.
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If you plan to buy or build space:
- You will be accountable for getting a valid CO from a local government authority.
- Review all building codes and zoning requirements for your place of business to ensure that your mortgage brokerage business is compliant and able to obtain CO.
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Service contract
Mortgage brokerage businesses require customers to sign service agreements before starting a new project. The agreement should clarify customer expectations and minimize the risk of legal disputes by setting payment terms and conditions, service level expectations, and intellectual property ownership.
7: Get Business Insurance
With a bus license and permit, insurance is required to operate your business safely and lawfully. Business insurance protects your company’s financial losses in the event of a covered loss.
Many types of insurance policies have been created for different types of businesses with different risks. If you are hesitant about the types of risks that your business may face, start with extensive liability insurance. This is the most common coverage small businesses require, so it is a great place for your business.
8: Define Your Brand
Your brand is what your company is for, as well as how your business is perceived by the public. A strong brand will help your business stand out from the competitors.
Start by networking locally. If you want to advertise, start small with business cards, flyers, and local advertising newspapers and online (pay-per-click).
How to keep customers coming back
Most people often do not buy large real estate. Therefore, if you want to keep them in mind for future business, then you need to get in touch with them. After the loan is closed, follow up with the lender to make everything work well for them. If possible, get them on your email list and send periodic updates about the local real estate market, insurance tips, money-saving tips, and ideas for living a healthier life.
Building relationships with your clients will make you more than just a brokerage firm that once secured a loan for their home.
9: Establish Your Web Presence
A business website enables customers to learn more about your company and the goods or services you offer. You can also use social media to attract new customers or consumers.
The firm may be small or large. Typically, a small mortgage brokerage firm has a team of 1 to 5 people. However, most brokerage firms operate out of an office, as most lenders seek to meet with a mortgage broker in a professional setting.
Know the complete information about How to Start a Mortgage Brokerage Firm in Mississauga.
