If you’ve landed on this article page, you’re probably searching for a
good business idea—an idea that’s light on the pocket but heavy on
returns, promising both a fulfilling journey and potential profit.
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How to start Mortgage Bank in Nigeria
A mortgage is a debt instrument specific to the real estate
industry. It is secured by the collateral of a real estate
property. The borrower is obligated to pay back the loan over
time. Mortgages make it easier to purchase large real estate
properties without having to pay a large purchase price upfront.
The borrower instead gets the opportunity to repay the loan over
time – in periodic installments in addition to interest
payments. After paying back the loan, the borrower becomes the
owner of the property free and clear. Mortgages can also be
referred to as liens against property or claims on property.
A mortgage bank operates under the banking laws applicable to
each state they operate or do business in. The banks sell off
the mortgage loans in the secondary market because the funds
received thereafter pay for their warehouse lines of credit,
which enables them to continue to operate and lend.
Starting a mortgage company can be very profitable. With proper
planning, execution and hard work, you can enjoy great success.
Secure Startup Funding for Your Mortgage Company (If Needed)
In developing your mortgage company business plan, you might
have determined that you need to raise funding to launch your
own business.
If so, the main sources of funding for a mortgage brokerage
business to consider are personal savings, family and friends,
credit card financing, bank loans, crowdfunding and angel
investors. Angel investors are individuals who provide capital
to early-stage businesses. Angel investors typically will invest
in a mortgage company that they believe has high potential for
growth.
steps to help you find a proper location for your mortgage
company.
Decide what type of location you want for your mortgage company.
This could be a storefront, office building, or even a
home-based business.
Research the areas that fit your needs and are affordable.
Narrow down your search to a specific area or neighborhood.
Get in touch with local real estate agents to see if any
properties are available in your desired area.
Once you find a property, take into account the necessary
renovations that may need to be made before you can open your
business.
Finalize the lease or purchase agreement and get started on
setting up your new mortgage company.
What are the most important considerations when starting a
mortgage company?
The mortgage industry landscape
Mortgage lending is generally a recession-proof business.
However, the mortgage industry has never been the same since the
housing market crashed in 2008. At the time, many people assumed
the industry was coming to an end, but in reality, it meant the
end for many small mortgage brokerage businesses.
More importantly, it leads to existing mortgage brokers offering
better products and impeccable services. Over the last 10 years,
the industry has seen a sharp introduction of new products, such
as Alt-A mortgages, subprime mortgages, and NINJA loans. Lending
standards have also undergone several changes through the years
especially in the area of home loans.
Your mortgage niche
As a startup, it’s best to focus on a specific niche instead of
trying to cater to the entire industry. It’s simply too broad.
Plus, it would mean stretching yourself thin which could leave
you unable to provide quality service all around. Sticking to a
niche is also great for your marketing efforts, as it allows you
to have a more defined target audience.
One of the best ways to decide on a niche is to focus on even
more specific attributes of your target market, such as
occupation and interests. You could start small and then add
more niches along the way. Some of the most popular niches in
the industry today include: Residential mortgages, Home equity
loans, Commercial mortgages, Mortgage lending to veterans,
Mortgage lending to farmers, Mortgage lending to educational
institutions, Vehicle loans.
Profitability in the mortgage lending industry largely depends
on how well you’re able to stay ahead of the competition. Make
no mistake, this particular industry is as competitive as they
come. The worst part is there isn't much you can do to
differentiate your loan programs. Your main selling points are
appealing interest rates and ease of doing business. But then
everyone else is doing pretty much the same.
Conducting a competitive analysis within your chosen niche is a
compulsory step in any new business venture. Starting a mortgage
company is no different. Take the time to understand who you’re
up against, as well as a strategy for how to stand out to
potential customers.
After sorting out your office space, you’ll need to get the
necessary equipment to begin operations — Computers, internet
connection, telephone lines connections, furniture, signage, and
more. Start small and upgrade along the way. However, don't
skimp on the important stuff like computers, internet
connectivity, and any other items or equipment that can directly
impact how well you get your work done.
Market your new business
As a mortgage brokerage business, you’ll likely be marketing to
homebuyers, property developers, and real estate agents. Some of
the most important marketing tools to get include a professional
website, social media pages, and a customer relationship
management (CRM) platform.
As your business picks up and you start getting a steady stream
of clients, you can look into getting business cards to up your
networking game. Of course, don't forget to ask for referrals
too. They’re one of the most powerful client acquisition methods
in the mortgage industry.
Interpersonal skills — It’s important to have a friendly and
outgoing personality as a business owner. This would help you
communicate more effectively with your clients, staff, and the
lenders that you would represent.
Negotiation — As a mortgage broker, your job primarily entails
brokering strong lender-borrower relationships. This means your
negotiation skills must be on point to ensure both parties reach
a satisfactory agreement.
Organization — Having strong organizational skills is important
to help you stay on top of the day-to-day running of your
business.
Patience — The loan application and approval processes can be
time-consuming and as the mortgage broker, you’re firmly at the
center of them all. You’ll also need to be able to accommodate
various client demands and expectations, many of which may not
always be as straightforward as you’d like. You must learn to be
patient if you want to be able to handle all of these potential
issues in your business.
How to set up your mortgage company online
Starting a mortgage company is generally easier today than it
was a few years ago. This is mainly due to the abundance of
resources and specialized services that are available to you
today. Following the steps in this guide should get you there,
but pay close attention to any recent changes or regulations in
the mortgage industry as well, as they could impact the startup
process.
Get our Practical Training Guide on how to set up a Mortgage Business in Nigeria.. We provide all the tools and services that you would need to establish a powerful online presence for your mortgage brokerage. . We also offer a host of built-in tools like billing and invoicing systems, contact management, and online appointment scheduling tools.
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