Wondering how to become a commercial mortgage broker? In this guide, we’ll go over the skills and qualifications you need to become one
If you want to pursue a career as a mortgage broker in Australia, you need to be committed and consistent. Listening to the advice of seasoned professionals in the industry can go a long way. If done right, becoming a commercial mortgage broker can be a fulfilling career and best of all, a lucrative one.
For aspiring mortgage brokers, focusing on getting clients from the business sector can be a smart move. Corporations and business owners tend to look for spaces to rent out for commercial purposes or properties that they can buy to build their headquarters. In turn, they hire the services of commercial mortgage brokers to help them take out property loans. They apply for mortgages as business entities instead of individual home buyers.
In this article, Mortgage Professional Australia discusses how to become a commercial mortgage broker. We'll also shed light on what it is and how it differs from the typical mortgage broker in the country. We’ll also go over other relevant details such as the skills needed by commercial brokers. Read this guide to find out if this profession is for you.
What is a commercial mortgage broker?
Commercial mortgage brokers serve as the bridge between clients from the business sector and mortgage lenders. Unlike the typical mortgage products presented to individual borrowers, clients of commercial mortgage brokers will be presented with commercial property loans. These commercial mortgages are generally secured for the purpose of building commercial properties such as:
- office building
- shopping centre
- industrial warehouse
- apartment complex
To know more about the commercial property market in Australia, watch this video about an insider's look into today's commercial mortgage space:
What’s the difference between a commercial mortgage broker and a mortgage broker?
A commercial mortgage broker is the same as any other broker in Australia. The sole difference is that they are focused on clients who are business owners or those who want to apply for a mortgage on behalf of their company.
Becoming a commercial mortgage broker in Australia
If you want to help businesses and companies with their mortgage needs, you need to follow the step-by-step process on how to become a commercial mortgage broker in Australia. First, you need to complete all the requirements. Then, you must take and pass the licensure exam.
What qualifications do I need to be a commercial mortgage broker in Australia?
Commercial mortgage brokers require the same qualifications as mortgage brokers. There are two qualifications you can have to become a licensed mortgage broker in the country:
1. Certificate IV in Finance and Mortgage Broking (FNS40821)
The Certificate IV in Finance and Mortgage Broking (FNS40821) is the minimum qualification if you want to become a commercial mortgage broker in Australia.
Earning this certificate shows that you are committed to following the rules and regulations in the mortgage broking industry. It also demonstrates your willingness to work towards professional development.
2. Diploma of Finance and Mortgage Broking Management (FNS50322)
The Diploma of Finance and Mortgage Broking Management (FNS0322) is a higher qualification for those who are already part of the mortgage broking sector.
If you want to be trained in leading a team or managing a brokerage firm, getting this diploma is a must. It will boost not only your knowledge as a mortgage broker but also your credibility.
After completing the courses above, there are three more steps on becoming a commercial mortgage broker in Australia:
- join a professional association
- choose an aggregator
- become a licensed commercial mortgage broker
To better understand each step, let’s discuss them at length below:
1. Join a professional association
Aspiring mortgage brokers who will focus on the commercial sector need to join a professional association in Australia. They can choose from two associations:
- Finance Brokers Association of Australia (FBAA)
- Mortgage and Finance Association of Australia (MFAA)
Here are the steps that you should take if you decide to join either of them:
How to join the Finance Brokers Association of Australia (FBAA)
- select a membership category
- submit your application online
- await processing and approval
- pay your membership fee
This is just an overview; learn more about the details in this guide on joining the FBAA.
How to join the Mortgage and Finance Association of Australia (MFAA)
- sign up with the MFAA
- get qualified
- choose an aggregator
- choose a mentor
- apply for membership
You’ll find complete information in our article on how to join the MFAA.
2. Choose an aggregator
The next step on how to become a commercial mortgage broker is to choose an aggregator. This is needed by commercial mortgage brokers to connect with various mortgage lenders such as:
- commercial banks
- member-owned banks
- building societies
- credit unions
- other mortgage providers
Aside from giving access to different types of mortgage lenders, an aggregator also helps in the career development of a new commercial mortgage broker. They provide platforms and tools for:
- client management
- processing loan applications
- marketing their services to the public
The aggregator can also help with the commercial mortgage broker’s compliance obligations or even with professional indemnity insurance. These services vary with each aggregator, highlighting again the importance of choosing the right one.
What are aggregators?
An aggregator plays the role of bridging mortgage providers and commercial mortgage brokers. They are also called dealer groups or franchise groups in Australia.
Once an aggregator provides a commercial mortgage broker access to a panel of mortgage lenders, the broker will be accredited. This accreditation from the mortgage lender is necessary before the commercial mortgage broker can offer the lender’s products to their clients.
This also means that the more panel of lenders a commercial mortgage broker has, the more options it has to offer their future clients.
Choosing an aggregator is also related to the broker’s chosen professional association. This is because the FBAA and MFAA both work with their own partner aggregators. As such, the commercial mortgage broker will be appointed by the aggregator as an Authorised Credit Representative (ACR), under the aggregator’s Australian Credit Licence (ACL).
Overall, this is why going with the right aggregator is important for commercial mortgage brokers in Australia. Choose from among Australia’s top mortgage aggregators for 2024 to get your career off to a good start!
3. Become a licensed commercial mortgage broker
Do commercial mortgage brokers need licences in Australia? Yes.
As mentioned above, commercial mortgage brokers in Australia need to be appointed as an ACR under an aggregator’s ACL. The Australian Securities and Investments Commission (ASIC) governs the process of getting a licence as a commercial mortgage broker.
This licence will allow commercial mortgage brokers to work legally as an intermediary between a bank or mortgage lender and their clients.
The licensing requirement is part of the government’s regulation of this profession. Penalties will be imposed on persons engaged in credit activities without the ACL.
Steps to get the ACL under ASIC
Here are the steps to take when getting the ACL under ASIC:
- access the ASIC website to start the online licence application
- complete an application (Form CL01) and lodge it with ASIC
- pay the application fee
- meet the requirements for a licensee
Now that you know the steps on how to become a commercial mortgage broker in Australia, the next part is to acquire the essential skills needed to hone your craft. But before that, you might want to check out this video on how to be a top commercial mortgage broker in Australia:
Check out Australia’s best commercial brokers for 2024 for a bit of inspiration. Some of them have shared their stories with us – click on their profiles to find out how they rose to the top!
What skills do you need as a commercial mortgage broker?
To become a commercial mortgage broker, you need to develop a set of skills. These will come in handy even before you start getting clients. Here are six essential skills for commercial mortgage brokers:
- financial understanding
- ability to negotiate
- interpersonal skills
- market awareness
- problem-solving ability
- risk assessment
Let’s look closer at each essential skill to have and develop as a commercial mortgage broker:
1. Financial understanding
Commercial mortgage brokers must have financial understanding especially when dealing with monetary figures related to mortgage transactions. Analysing interest rates is also an integral part of commercial mortgage broking. These rates will be one of the bases when it comes to the mortgage products that you will present to your clients.
To help you learn about the Australian mortgage market’s changing rates, you might want to bookmark this guide to Australian mortgage rates. This is updated weekly so be sure to check back to stay informed.
2. Ability to negotiate
Commercial mortgage brokers must be good at negotiating property loan terms. This involves requesting the lowest possible interest rates for your clients as well as repayment schedules. Strong negotiation will often lead to better deals for your clients. As such, your brand or name will be established.
3. Interpersonal skills
Having strong relationships with clients, lenders, and other professionals in the mortgage sector is important. Relationships founded on trust can result in referrals and repeat business.
Developing your interpersonal skills is also necessary when building a network of contacts in the mortgage industry. Networking with real estate agents and credit professionals might lead to valuable referrals as well.
4. Market awareness
Understanding property values and being aware of economic conditions in the country helps commercial mortgage brokers advise clients more effectively. Staying updated is always helpful in this line of profession as mortgage and bank rates are often fluctuating.
5. Problem-solving ability
Commercial mortgage brokers must learn how to swiftly identify and fix issues that arise during mortgage transactions. Clients will be able to trust you if you are bent on solving problems.
6. Risk assessment
Finally, evaluating risks is a valuable skill to have as a commercial mortgage broker. Understanding factors like your clients’ credit history as well as the value of the property will help you assess the possible risks that might arise in the mortgage.
Why should you become a commercial mortgage broker?
A commercial mortgage broker enjoys all the rewards of this profession—much like a typical mortgage broker. As for its upsides, there is a higher possibility of earning more because of the type of clientele that commercial mortgage brokers have.
While mortgage brokers who focus on residential home loans deal with individual home buyers across the country, those who are into commercial lending have greater chances of working with bigger clients. These can be business owners and corporations. So, if you want to make it big in the mortgage broking sphere, becoming a commercial mortgage broker might just be the profession for you.
Are you an aspiring commercial mortgage broker? Did you find this guide helpful? Share your insights in the comments section below.
