Mortage Broker Business Plan Sample

Do you want to start mortgage broker business?

Do you want to open a mortgage brokerage business? Well, opening a mortgage company is undeniably a business that involves a lot of effort, but the rate of return you will get after all your efforts in this business will compel you to thank yourself later for all those efforts. Everybody requires a house for shelter or a place for work, in the United States, many countrymen, as well as foreigners, aren’t capable of buying the real estate especially in big cities due to the sky-high costs.

A mortgage broker business is based on arranging transactions between the buyer and banks or real estate firms, on easy installments and down payments after taking a mortgage, debt property. The business is in great demand, as this is the only way for average or low-income people to have a property or vehicle of their own in big cities.

So, if you have planned to start this business, then don’t just build castles in the air, prepare a comprehensive and detailed business plan to take a startup. In case, the complications of writing a business plan are bothering you, you can take help from this sample business plan written on how to start a mortgage brokerage for a startup named, ‘Gary Brokerage’, owned by Gary Cleese.

Executive Summary

2.1 The Business

Gary Brokerage will be a licensed and registered mortgages company, owned by Gary Cleese. The company will be located in New York, and will initially operate in only one city. The business is aimed to provide housing and real estate facilities to a large audience by selling mortgages for them on easy installments. Gary has many mortgages of housing and commercial buildings from the real estate business plan, he has arranged an organized section in his company for gathering and checking the required documents of the borrowers, to provide them with mortgage pre-approval. After the borrower has met with the eligibility requirements, he/she will be given the ownership of the desired property with easy to pay installments in accordance with the buyers’ income.

2.2 Management

To start a mortgage brokerage, management is the core thing you need to focus. The business involves complicated inquiry and agreements, and long-term payments, so, you must organize each and everything, and must have a formulated management system for running this business.

Considering the importance of management system, Gary has prepared the list of employees, their jobs description, and their responsibilities in his mortgage lender business plan. Gary has decided to manage the business by himself with the help of two co-managers. The sample business plan of Gary Brokerage is given here for your help if you want to know how to start your own mortgage broker business.

2.3 Customers

Knowing your customers and their demands before starting a new business is a thing, that can help you a lot in devising your policies. Gary Brokerage is intended to serve the renters and foreigners in New York by helping them in purchasing and owning the real estate.

2.4 Target of the Company

The company aims at becoming the most recognized and the most renowned brokerage in the whole New York City within just six to seven months of the launch, by providing incomparable customer service to the inhabitants of the New York City.

Company Summary

3.1 Company Owner

Gary Cleese will be the owner of Gary Brokerage; Gary is an LLB from the Columbia University and has been practicing law for more than fifteen years in the New York. Now, when he has received his huge shares from the legacy, he wants to invest them in profitable businesses. Gary has an in-depth knowledge about agreements and inquiry needed for taking loans, and other means of buying property. He is also well-known for his public speaking and management skills; he is starting a loan broker business, to invest his skills and money in a project which he finds the most suitable for himself.

3.2 Why the Business is being started

After receiving his shares, Gary has more than enough money to invest in some business. Throughout all his career, he has practiced law on dealing with the disputes on land ownership. This experience of Gary has made him a well-informed person about all types of land ownership, and tuned in with the pioneers of real estate and mortgage business. Gary has many unique mortgage broker marketing ideas, and he can only work on them by opening his own brokerage.

The other reason of starting a mortgage brokerage is the rising demand of this business. Shelter is a basic necessity of every human, and in the big cities like New York, what most average people are deprived of is shelter; a land of their own. In New York, the median price to buy a house is $1.6 million, which makes it about impossible for a foreigner, a beginner entrepreneur or a new jobholder to own real estate. Such people prefer to pay some down payment and buy a mortgage on economical installments.

3.3 How the Business will be started

Gary has planned everything about his business, he even has got prepared his mortgage business plan template. A large building on the 5^th Avenue will be used as the company’s office. The business will be registered by the NMLS, Nationwide Multistate Licensing System & Registry. Gary has relations with top real estate owners, he will collect information about several mortgages to lend to the borrowers before starting the business. A team of trusted and dedicated members will be hired to assist Gary in running the business. The borrowers will have a variety of choices in buying a mortgage by remaining in their income range and needs. Organized and separate sections will be made for maintaining the proper inspections and records of both the borrowers and the lenders. Gary has decided to provide the borrowers with the right of recession, furthermore, he’ll have flexible policies in case of mortgage defaults.

The detailed start-up requirements, start-up funding, start-up expenses, total assets, total funding required, total liabilities, total planned investment, total capital and liabilities as forecasted by experts, are given below:

Services for customers

You have to decide your services before starting a mortgage lending company  because in a mortgage business you have to do all the pre-work required for a certain service you are going to provide. For example, if you decide to provide home equity loans, you have to work out on it to fulfill its requirements and employing the needed company persons for estimating property value as well as other chores.

So, if you are searching on how to start your own mortgage company, the foremost duty is to formulate a business plan including all the services you want to provide your customers as well as the detail that how will you manage to provide them with the services. If you are having difficulty in deciding your servicing, you can take help from many mortgage loan officer business plan examples available on the web like this one.

Gary Brokerage will provide the following services to its customers:

• Brokering Residential Mortgage: We’ll guide the borrower and the lender and negotiate loans between them in buying residential properties. We’ll do research in finding the requirements of our clients, and will do all the settlements and legwork on their behalf.
• Brokering Commercial & Industrial Real Estate: Commercial estate is any property bought for the purpose of generating profit. We’ll arrange the place and loans for the businessmen who want to start a new business or a branch of previously existing business but are not aware of the opportunities, taxations, and procedures of buying estate in the big city, we will save them from getting into the complications about which they knew not.
• Brokering Home Equity Loans: The persons who own some kind of property, but require loans to finance their expenses such as medical, education etc. will be given loans according to the value of their property. Gary will hire the services of appraisers to determine the value of property and interest rate on loan.
• Brokering Vehicle Loans: In case, you aren’t in a position to buy a vehicle in New York, don’t worry, Gary will buy the vehicle for you and you will need to pay the amount in the form of installments with very little interest.

Marketing Analysis of mortgage broker business

When you are taking an initiative and starting a totally new venture, you have to accustom various measures to understand the demands and requirements of the public you are going to target. The success of your startup will be entirely dependent on how efficiently you are able to communicate with the needs of your borrowers and terms and conditions of your lenders. An accurate marketing analysis is needed to be done to understand whether you will be able to start your own mortgage company  or not, or whether the market you are choosing for your startup has the stamina or potential of a new startup or not. In your mortgage company business plan, you must carry out proper marketing analysis to identify your target groups before time. You have to do it before starting a mortgage company, as it will assist you in defining your services and marketing strategy.

If you are looking for help on how to start a mortgage brokerage company, you can take help from this mortgage loan officer business plan sample written for the startup of Gary Brokerage. You can also seek help from several business plan samples available on the web. However, if you are starting a mortgage broking business on large scale, then instead of taking help from this mortgage broker business plan, you should hire an expert marketing analyst to make a mortgage broker marketing plan for your startup.

A successful marketing strategy can only be developed after knowing the target audience and potential customers. Considering the significance of marketing analysis Gary has hired marketing experts for carrying out extensive research to identify his target customers and develop a unique marketing strategy to attract them.

5.1 Market Trends

Mortgage brokering business has outstanding demand due to the increasing confidence of people in the services. Reasonable economic conditions and low interest rates have constrained a lot of people in the United States to buy vehicles and real estate on mortgage loans. The business is in the mainstream right now and according to IBISWorld, is still growing at an annual rate of 5.8 percent. There are more than 844,296 real estate brokering industries currently running in the United States, generating a revenue of $155 billion annually, employing 1.1 million population of the United States. The statistics clearly demonstrate that you can generate a large amount of profit provided that you plan and market your business successfully.

5.2 Marketing Segmentation

If you are starting a mortgage brokerage business, you have to make a detailed mortgage officer bank loan business plan covering the details of how will you attract your target audience. In case, you need assistance in making your mortgage banker business plan, you can take help from this sample business plan of Gary Brokerage.

The detailed marketing segmentation of our target audience is as follows:

5.2.1 Renters: Our marketing analyst has identified this as our biggest target group. Many people in the New York City live on rent and want to own their own estate, but the lack of knowledge and money make them unable to do so. These people include foreigners, new jobholders or people with average incomes. Such people can’t afford buying a house for themselves directly. So, in order to buy a land, or house they prefer to consult a mortgage broker, and own the property by paying reasonable installments and down payment on mortgage. Our experts have defined this category as the major borrowers of our service of brokering vehicle loans too. We believe that our low interest rate, simple policies and strategic location will surely pull them to our office.

5.2.2 Businessmen: Our next target customers will be the businessmen who want to extend their setup or want to open up a new branch but do not have time to indulge in the complications of buying estate. The executives usually want to bypass the tensions of buying estate or office in a new city of entirely new trends. They prefer to contact the mortgage brokers to arrange the setup for them. Our experts have identified this group as our potential borrowers of brokering commercial and industrial real estate mortgages.

5.2.3 Property Owners: Our business is meant to serve both the lenders and the borrowers. So, our experts have identified the real estate owners and the owners of automotive industries as our third target audience. Such people will contact us whenever they want to sell their property or automobiles.

The detailed market analysis of our potential customers is given in the following table:

5.3 Business Target

Gary has high goals and aims regarding the growth of his business. The target which Gary Brokerage intend to fulfill within the five years of launch is to become the most trusted and renowned mortgage broker business in the New York City. Our business target is to provide excellent and reliable service to our lenders as well as borrowers. We aim at providing top-level customer service to all our target groups. Our every employee and salesperson will treat our customers with utmost respect so as to build a long-lasting relationship with them.

However, the company also has some long-term targets which are to be fulfilled after we have established in the New York City completely. These include opening another branch of Gary Brokerage in the current or neighboring city and increasing our services to serve more and more people.

5.4 Product Pricing

Setting the prices of your services is the most thoughtful and challenging task, as you have to keep up your finances and allure the customers at the same time. To introduce ourselves to a larger audience, we have decided to keep our prices lower than our competitors in the initial phase. However, we believe that the company will still be able to fulfill its financial goals.

Strategy

Sales strategy is the most decisive and effective part if you are going to start a mortgage company . In your mortgage marketing plan, you must include the ways and methodologies to increase the sales of your services and generating more and more profit. Gary carried out an extensive research and also hired the services of financial experts to work in collaboration with the company’s advertising manager and administration to devise an effective sales strategy.

If you are not clear on how to start a mortgage company  or how to develop effective sales strategy, you can take help from this mortgage loan officer business plan template  of Gary Brokerage.

6.1 Competitive Analysis

Gary had the idea of the tough competition he will have to face in the market, that’s why he has come up with the excellent competitive edges that all his other competitors lack. Gary believe that if marketed properly, these competitive edges will give him unparalleled superiority in this business.

Our biggest competitive advantage lies in the power of our crew, each member has a thorough understanding of property types, credits, inspection systems and loan amounts. We have a team of dedicated and honest workers who will go all the way to provide maximum satisfaction and easy access to mortgage loans to our customers. Our trained and skilled professionals will do all the research and strenuous work on your behalf for you. Our dedicated workers will interpret your needs and range of spending before presenting the most suitable and economical property to you.

Secondly, Gary has terms and alliances with the leading real estate barons and developers alongside automotive shop owners. He can surely be able to find out the most suitable lender for you after understanding your needs. His former experience as a lawyer is another competitive advantage as he knows all the procedures, registry and verification systems. Moreover, Gary Brokerage is located on the main road which is easily accessible and visible by our target groups.

6.2 Sales Strategy

The success of a startup depends on the extent to which you are able to advertise your services. Considering the importance of targeting large audience, Gary Brokerage will advertise its services by using the following means:

• We’ll make our website creating a login for our borrowers and lenders with ultimate cybersecurity, by which they will be able to pay the installments through their Payoneer or PayPal account
• We’ll create a Facebook page to leverage the opportunity of advertising our services to a large audience
• Before using our services, you can get to know about our work efficiency by reading the feedbacks of our clients and lenders on our website or Facebook page
• We’ll fix our posters on bustling areas to let the people know about us
• We’ll provide maximum ease to our customers and will keep our interest rate as low as possible

6.3 Sales Forecast

We believe that if people try our services for once, they will surely trust us again for the rest of their lives. Considering the market demand and quality of our services, our sales pattern is expected to increase with the coming years. By analyzing our market segmentation strategy, our experts have forecasted the following sales on yearly basis which are summarized in the column charts.

The detailed information about sales forecast, total unit sales, total sales is given in the following table:

6.4 Sales Monthly

6.5 Sales Yearly

Personnel plan

The crucial step before starting a mortgage broker business  is to find a team of hardworking and dedicated workers. Your marketing and sales strategy can only help you in gaining customers, but the enthusiastic employees can help you in maintaining those customers. So, before you start mortgage company, hire your crew wisely as you will be solely dependent on them.

For those people who want to know how to open a mortgage brokerage business, we have provided here the sample business plan of Gary Brokerage covering the details of the staff, he will hire.

7.1 Company Staff

Gary will act as the Chief Operating Officer of the company and will discipline the manager and the company by himself. The company will initially hire following people:

• 2 General Managers to manage the operations
• 10 Mortgage Brokers and Loan Services Consultants for brokering mortgages
• 4 HR Managers for arranging meetings of borrowers and lenders and for carrying out induction for recruiting new member
• 4 Administrators / Accountants to maintain financial records
• 2 IT Experts to manage the company’s website and social media pages
• 5 Data Analysts to interpret and organize data
• 2 Sales and Marketing Executives responsible for discovering new ventures.
• 2 Drivers for routine works
• 3 Cleaners for the maintenance of company’s office
• 1 Front Desk Officer to act as a receptionist in the company office

All the employees will be trained for their duties and works, before the initiation of the startup.

7.2 Average Salary of Employees

The following table shows the forecasted data about employees and their salaries for the next three years.

Financial Plan

The last step to be taken to start a mortgage business  is to formulate your financial plan. Financial plan is undoubtedly, the most decisive part of the success of a startup especially if you want to grow your business. Financial planning before starting mortgage company can help you in meeting your long-term financial goals, by monitoring your flow patterns and spending. Your comprehensive and accurate financial plan can help you in facing the worst situations and ups and downs you can encounter while running your business.

Considering the importance of an accurate and comprehensive financial plan, Gary has hired the services of a financial planner advisor to make a financial plan for his business. Gary Brokerage will be mainly financed by Gary himself. No equity funding or outside loan will be required unless the company expands faster than forecasted. You can take help from this sample financial plan if you need help about how to start a mortgage brokerage business, and you can also find many other business plan samples available online. However, the best choice for if you are lacking knowledge on how to start mortgage broker business or how to make an effective financial plan is to hire a professional to make precise financial plan for you, saving you from the trouble of gathering all information by yourself.

8.1 Important Assumptions

The company’s financial projections are forecasted on the basis of following assumptions. These assumptions are quite conservative and are also expected to show deviation but to a limited level such that the company’s major financial strategy will not be affected.

8.2 Brake-even Analysis

The following graph shows the company’s Brake-even Analysis.

The following table shows the company’s Brake-even Analysis.

8.3 Projected Profit and Loss

The following table show the company’s expected Profit and Loss situation on the monthly and yearly basis.

8.3.1 Profit Monthly

The following charts shows detailed information about profit and loss, and total cost of sales.

8.3.2 Profit Yearly

8.3.3 Gross Margin Monthly

8.3.4 Gross Margin Yearly

8.4 Projected Cash Flow

The following column diagram shows the projected cash flow.

The following table shows detailed data about pro forma cash flow, subtotal cash from operations, subtotal cash received, sub-total spent on operations, subtotal cash spent.

8.5 Projected Balance Sheet

The following projected balance sheet shows data about total current assets, total long-term assets, total assets, subtotal current liabilities, total liabilities, total capital, total liabilities and capital.

8.6 Business Ratiosы

The following table shows data about business ratios, ratio analysis, total assets, net worth.

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