The current rate environment has many mortgage lenders wondering if they could do things differently than their banks and underwriters. Some even find themselves comparing their income to a mortgage branch manager salary and wondering if they could start a better mortgage franchise. 

Wondering if there is a better way is understandable. Lenders often ask themselves (and Google)  if they should leave an institution or move on. Even without the added stress of a high-rate environment, working conditions for mortgage lenders at large institutions can be hit or miss, leading to a fairly turbulent job market. 

Here are the top three reasons lenders leave their financial institutions for greener pastures: 

1. Between the fees, compensation models, and often-convoluted salary structures, many mortgage lenders feel they can make more money elsewhere or at least manage the funds in their portfolio better.
2. A complicated loan origination process can lead to missed deadlines or, worse, missed closing dates, which can be devastating for a lender’s business, client relationships, and referral relationships. 
3. Large institutions often promise a lot in the recruitment process. But, as time passes, lenders lose the support they need, whether financial investment, staff support, marketing help, or even trust. 

But if so many lenders think they could do better themselves, why don’t they? 

“Most branch managers get comfortable and aren’t aware they are being taken advantage of in their current platform. MortgageRight provides the freedom and transparency that’s crucial to run a successful business. The first step is being with the right company. If you’re not, the opportunity cost can be enormous.”

– Alvaro Moreira, Branch Manager

The Costs of Running a Mortgage Franchise

The biggest hurdle to starting your own mortgage franchise is funding it, which is ironic since that’s more or less what lenders do. Cost include:

• Rent
• Salaries
• Benefits Packages
• Recruiting
• Utilities
• Office Supplies
• Credit Report Pulls
• Expensive Software and Technology
• Marketing Costs
• Licensing

Starting any business is difficult, and a company that deals in the hundreds of thousands per transaction comes with a lot of risk. But it’s not impossible. 

Your Roadmap to Branch Management Success 

Before you consider opening your own Mortgage Franchise, ask yourself if you have the drive and self-starting mindset that it takes to generate clients, build a solid incoming and outgoing referral portfolio, create a positive environment for your staff, and still do the day-to-day work of mortgage lending. 

If you do, starting your own branch may be the right move. Many mortgage lenders with a background at a lending institution have found great success starting their own mortgage franchise. Here is what you need to get started. 

Get Licensed

First things first, you need to ensure that you have the authority to execute mortgages with an NMLS license through your state’s issuing agency. If you don’t already have a license, it can take months of studying, continuing education costs, and licensing fees that add up quickly. 

These costs vary by state, but typically include:

• Education and Test Prep Courses
• State Licensing Exam
• State Licensing Fees
• NMLS Processing Fee
• Background Check
• Credit Check
• Annual Renewal

You will also have to pay business licensing and incorporation fees as well as licensing or continuing education expenses for any employees. 

Find a Space

Your lease or mortgage will be one of your most significant monthly expenses, but it’s also the physical representation of your branch’s brand. Cheap rent is excellent but often has downsides, leaving potential clients wondering if you can fund a substantial loan out of a shabby office. 

Build Your Tech Stack

You’ll need physical equipment, such as computers, tablets, printers, filing systems, a secure server, and a telecom system. But you will also need a long list of essential tools and software to service your loans, keep your clients happy, and keep your customer funnel running smoothly.

• Essential Tools
  • Loan Origination tool
    • You need a loan origination tool to draft consistent and comprehensive loan language.
  • Pricing and Locking Files
    • If you want to give your clients a longer purchase window at the lowest rate, you have to have the infrastructure in place to lock in the deal. 
  • Customer Relationship Management Software
    • In today’s world of always-on customer service, a CRM platform is non-negotiable. But vetting the right tool for your business and negotiating a fair price can take weeks. 
• Additional Tools (mention what these are/are used for, not the company names)
  • White Label Digital Client-Facing Mortgage Platform
  • Business Phone and VOIP System
  • Appointment-Booking and Calendar-Management Software
  • Post-CLosing Client Retention Tools
  • Email Templates and Tracking
  • Video Sales and Closing Tools
  • Social Media Management Platform

Hire Your Team

Your building and tech stack are just the foundation of an excellent mortgage-lending business. Everyone knows it’s the people who make a business a success. You will be expected to make significant investments in building and maintaining your team so that you are ready to handle volume when rates drop and demand skyrockets. 

When putting together your compensation packages, you will need to consider what salary and benefits would have kept you at your last intuition with expenses including:

• Recruitment
• Salaries
• Bonuses
• Continuing Education
• Additional Licensing 
• Cost-of-Living Raises
• 401(k)
• Health Insurance
• Vision and Dental Insurance
• Profit Sharing

On top of all the expenses is the worry that you may not have the portfolio to support it, at least not at first. Check out the MortgageRight P&L Roadmap to see how much your portfolio could generate.

Offsetting Operational Costs of Your Mortgage Franchise

MortgageRight helps lenders get on their feet by offsetting operational costs in the business formation phase. 

“MortgageRight allows me the freedom to run my business my way. No other company does that.”

–Mike Russo, Branch Manager

MortgageRight funds all the initial startup costs and will pay a substantial amount of money to help a lender start their own branch.

How Much Does It Cost To Get Started?

When a lender decides to make the jump to their own mortgage branch, MortgageRight will help with business support, technology investments, and hiring costs. In fact, you can start a MortgageRight branch without any capital requirements because the company is willing to invest in you, the lender.

MortgageRight is designed to give talented, driven lenders access to the maximum BPS from the start so they can have the capital to scale, increasing everyone’s overall volume. 

That means many expenses don’t apply, like a 100+ BPS back-end scoop from the underwriter or unexpected and variable closing fees. 

What does MortgageRight pay for?

MortgageRight was founded by three experienced mortgage lenders who understand the difficulty of finding the funds to start a mortgage branch. That’s why they eliminate as many up-front costs as possible while working with branch managers to build a sustainable branch as quickly as possible. 

MortgageRight covers or mitigates the following costs:

• Licensing for you and your branch
• Upfront payment for the lease on your physical space
• MortgageRight covers technology, like laptops and any other systems you operate on, and gives it back to the branch.
• Operations staff salaries (not branch managers)
  • MortgageRight pays your team on day one, and you can pay that back over 6- or 12-month terms. 

Do You Have What It Takes to Run Your Own P&L Mortgage Franchise? 

Schedule a live demo of the MortgageRight platform to see if you can create a better work environment while making more money with your own mortgage franchise.