How to write a Mortgage Broker

Business Plan

Executive Summary

Start your mortgage broker business plan with an introduction, also known as an executive summary. 

The executive summary should provide a snapshot of your business. It should also highlight your goals and present the most critical aspects of your strategy.

Here's a step-by-step guide on how to write an effective executive summary:

1. Start with a strong opening statement.
2. Provide a business overview.
3. Outline your market opportunity.
4. Summarise your business goals.
5. Talk about your financial projections.
6. Discuss your current state of operations. 
7. List your funding requirements.

Begin by providing a brief introduction to your mortgage brokerage. This includes the name of the business, its location, and the services it offers. 

Quickly describe your business model. Mention how you generate revenue (e.g., through commissions from lenders, fees from clients, or both). 

You can also discuss whether you focus on residential, commercial, or both types of mortgages.

Provide a brief overview of the mortgage market in your area, including the size of the market, key trends, and your target customer base. 

Add a summary of your financial projections. You can provide your expected revenue, profit margins, and cash flow for the first few years. 

Don't forget to mention any funding requirements. This step is especially important if you are seeking financing or investment.

If your broker business is already operational, discuss your current state of operations.

Even though there are a lot of steps to cover, remember to keep it concise and to the point.

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Business Description

The next part of your broker business plan is the business description.

This section should give readers a better understanding of your mortgage brokerage and its place in the market.

This is some key information to add to this section:

• General business information
• Mission statement
• Vision statement
• Business goals and objectives
• Legal structure
• Company history (if applicable)

Start with the official name of your mortgage brokerage, after which you should explain what exactly it does. For example:

ABC Mortgage Solutions LLC is a limited liability company established in 2024, providing expert mortgage brokerage services to clients in Melbourne.

Your mortgage broker business plan should also include a mission and vision statement.

Your mission statement outlines your purpose. It should reflect the core values and objectives of your brokerage. 

Your vision statement explains your future visions for your mortgage brokerage. Give a thorough explanation of what you hope to achieve with your business. 

Divide your business goals into short-term, medium-term, and long-term goals, like this:

Describe the business model, including how your brokerage generates revenue. Explain whether you primarily earn commissions from lenders, fees from clients, or both.

Also, mention your brokerage's legal structure (e.g., sole proprietorship, partnership, LLC, corporation).

If your brokerage is already in business, discuss your company's history. This adds a personal touch and can help build credibility.

Market Analysis

Doing market research is a very important step in writing a business plan. 

Since you're writing a mortgage broker business plan, you need to do intensive research on your industry and market.

To make things easier, here are some elements to focus on:

1. Industry overview
2. Target market analysis
3. Competitive analysis
4. Market demand
5. Critical success factors  
6. SWOT analysis

The first step is an industry overview. Start with a broad overview of the mortgage industry, including its size, growth rate, and key trends. 

Factors to consider include interest rates, housing market conditions, and regulatory changes that may impact the industry.

The next step is to analyse your target market. You can do this by dividing it into specific groups, such as:

• First-time homebuyers
• Real estate investors
• Individuals refinancing their mortgages
• Commercial property buyers

Analysing your competitors is one of the main components of your mortgage company business plan. 

List your main competitors, including other mortgage brokers, banks, credit unions, and online mortgage platforms. Describe their strengths and weaknesses, as well as their market share.

You can present your competitive advantage like this:

A SWOT analysis can also show your readers you understand your industry and market. This refers to strengths, weaknesses, opportunities, and threats. 

Devote a section to market demand. 

Identify the factors driving demand for mortgage brokerage services, such as population growth, housing market trends, interest rates, and economic conditions.

Organisation and Management

In this part of your business plan, you should describe the organisation and management of your broker company. 

To be more precise, you can talk about about your business's organisational structure, management team, and human resources strategy. 

If applicable, include an organisational chart that outlines the hierarchy of your business. 

This should show the different departments or roles within the business and who reports to whom.

For example:

ABC Mortgage Solutions LLC operates as a limited liability company, providing the flexibility and protection necessary for a growing business. Our organisational structure is designed to support efficient decision-making and clear lines of responsibility. Below is our organisational chart, illustrating the reporting relationships within our company.

Then, you can provide details on the key members of your management team. Include their titles, roles, and responsibilities. 

Highlight each member's qualifications and experience in the mortgage brokerage industry.

If you have an advisory board or work with consultants, include details about these individuals and their roles.

Explain how their experience supports the business and helps guide decision-making.

You can also add a section on the ownership structure. 

If the business is owned by one person, mention that. If there is more than one owner or shareholder, provide information on their ownership stakes. 

Also, discuss any roles they may play in the business.

Products or Services

This next section is where you will list and explain the services you provide as a mortgage broker. 

These services may include:

• Help with loan applications
• Lender comparison
• Refinancing services
• Financial consulting and advisory services
• Commercial mortgage broker services
•  Home equity loans and lines of credit
• Post-closing support

Describe each service category in detail. Explain what each service involves, how it works, and the benefits it offers to your clients.

For each service, outline the process from start to finish. 

This is where you can talk about your unique selling proposition (USP). Tell your readers what sets your services apart from competitors.

This could be your personalised service, access to a broad range of lenders, or modern technology that simplifies the mortgage process.

Describe how your services are delivered. This could include in-person consultations, online platforms, or a combination of both.

You can also talk about customer support.

Explain the level of support clients can expect throughout and after the mortgage process. 

Discuss how you handle client inquiries, provide ongoing help, and address any issues that may arise.

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Marketing and Sales Strategies

This part of your business plan will tell potential readers how you plan to attract and retain clients. 

Here, you can explain which strategies you will use to promote your services as a mortgage broker. 

You have already analysed your target market in the market research section. Now, it's time to develop a marketing plan. 

Your marketing strategy could include the following elements:

1. Branding
2. Digital marketing
3. Content marketing
4. Traditional marketing
5. Partnerships and referral programs
6. Key performance indicators (KPIs)

First, describe your brand positioning. This is where you talk about your brand identity, core message, and the image you want to project to the market.

You will definitely want to use digital marketing. Discuss which online marketing channels you will use to reach new customers. 

If you're planning to use content marketing, make sure to explain how it can benefit your business. 

If relevant, describe your plans for traditional marketing methods. These could include print advertising, direct mail campaigns, radio spots, or sponsorship of local events.

Partnerships are key to mortgage brokerage businesses. 

Explain how you will use partnerships with real estate agents, financial advisors, and other professionals to generate referrals. 

You can also discuss any referral programs you will use to get partners and clients to refer your new business.

Finally, you will want to discuss key performance indicators (KPIs). 

Identify the key metrics you will use to track the success of your marketing and sales efforts. KPIs could be:

• Lead conversion rates
• Client acquisition costs
• Customer satisfaction scores
• Overall sales volume

Operations Plan

An operations plan details how your business operates on a daily basis. This includes listing all the processes needed to run your mortgage brokerage business.

This includes the key tasks, resource allocation, workflows, and the technology used to keep the business running.

When it comes to operations, you can describe:

• The location of your business
• Hours of operation
• Staffing and roles
• Key processes and workflows
• Technology 
• Human resources
• Risk management

Key processes can include client onboarding, loan origination, refinancing, special services, etc. 

Here's an example of client onboarding:

When a new client contacts ABC Mortgage Solutions, we begin with an initial consultation to understand their financial goals and homeownership needs. We then collect the necessary documentation, such as income statements and credit reports, and set up their profile in our secure client management system.

Describe the software and tools you use to manage your operations.

These could be Customer Relationship Management (CRM) systems, loan origination software, document management systems, and communication tools.

Explain your recruitment process. You can go into detail on how you make sure that new hires are a good fit for your company culture and meet your standards of service. 

Identify potential risks to your operations. 

These could include regulatory changes, market fluctuations, or data breaches. Then, explain how you plan to mitigate these risks.

Financial Plan

A business plan includes detailed financial projections. This includes startup costs, operating expenses, revenue forecasts, and cash flow analysis. 

This is very important because it shows your business is financially viable.

A business plan is critical if the broker needs to secure financing or attract investors. 

It demonstrates how the business will generate profits, repay loans, or provide returns to investors.

Here's how to structure and write an effective financial plan:

1. Identify the primary sources of revenue for your mortgage brokerage.
2. Explain how you set prices for your services and how you earn revenue. 
3. Provide a forecast of your sales revenue.
4. Name your startup costs and funding requirements.
5. Provide financial projections for the next few years.
6. Come up with a funding strategy.

Your primary source of funding can include commissions from lenders, fees for other services, and any other income streams.

Provide a forecast of your sales revenue. This includes the number of transactions you expect to close, the average revenue per transaction, and the expected total revenue for each year of the plan.

Specify how much capital you need to cover these startup costs and sustain operations until your business becomes profitable. 

Indicate whether you plan to fund these costs through personal savings, loans, or investors.

For financial projections, you need:

• Profit and loss statements
• Cash flow statement
• Balance sheet

Here's an example of a profit and loss statement:

Listing your funding requirements is a prerequisite if you want to seek funding with your business plan.

Conclusion

Finish your mortgage broker business plan with a conclusion. 

You can use the conclusion to repeat your main points. This is your final chance to impress your potential readers. 

Here's a short example of a catchy conclusion for your business plan:

ABC Mortgage Solutions wants to become a trusted leader in the Melbourne mortgage market by offering personalised, client-focused services, and leveraging strong industry relationships. 

With a clear growth strategy, a dedicated team, and a foolproof plan to manage operations efficiently, we are confident in our ability to achieve our financial goals and make a significant impact in the market. 

As we look to the future, we look forward to collaborating with investors and partners who share our vision of delivering exceptional value and service to our clients. 

Together, we can build a successful and sustainable business that thrives in a competitive industry.

‍Don't forget to add a call to action (CTA) at the end of your business plan. This is especially important for those seeking funding. 

Appendix

The appendix is used for adding documentation that will support your mortgage broker business plan. 

The types of documents you might want to add include:

• Employee resumes
• Market research data
• Partnership agreements
• Licenses and certifications
• Financial documents
• Sample marketing materials
• Business insurance policies

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