The mortgage brokerage launch plan
Every step from deciding to opening, in the order it happens, shaped to your situation, with your own numbers beside it. About 52 steps in 8 phases, 23 of them specific to a mortgage brokerage. Free to read; ticking steps off and putting in your own numbers come with membership.
The plan52 steps
- 01Not started0/6Fold
Decide with the numbersa week or two
Before a dollar is spent. Most expensive mistakes happen here, and this phase costs nothing.
A mortgage brokerage makes money one clean way: a commission on every loan it funds.
Typical for one unit is $500,000 to $5,000,000 a year; the owner keeps 22 to 34% of it before paying themselves. If that band does not cover what you need, that is the signal to pause and look again.
~50% survive 5 years. Roughly half of all new U.S. businesses reach five years.
Twelve questions about your money, time, experience and temperament, scored. Then the 5 questions this business asks of its owner, about the hours and the work. Answer both before you spend a dollar.
Rule of thumb: if you can buy a brokerage with producers likely to stay and durable purchase-market relationships (ideally with the owner through a transition), buying buys you years. Answer it in your situation above and the plan reshapes.
Customers, prices, rent, staff pay, what it costs to open. We filled in typical numbers; change what you know and everything on this page follows.
- 02Not started0/5Open
Plan the moneya week
What it costs to open, where the money comes from, and the cushion that keeps you alive until the business pays for itself.
A brokerage is one of the most capital-light businesses to start, because you do not lend your own money: there is no balance sheet to fund.
The itemized cost to open8 lines
- Company & loan officer licenses, surety bond: $4,380 to $15,050NMLS company license and five MLO licenses; one state at the low end, a few at the high end
- Compliance program & business formation: $4,500 to $15,000Policies, AML and information security programs, QC plan, entity and LO pay agreements
- Computers, phones, printers & network: $9,902 to $39,330Business laptops and monitors, desk phones, a copier, scanners, firewall and backup
- Furniture & office refresh: $5,071 to $63,012Desks, locked files and a meeting room; paint, carpet and a private office at the high end
- Signs, website & launch marketing: $2,400 to $30,800How the first borrowers and realtors find you
- Insurance (E&O, fidelity bond, office, cyber, workers comp): $3,485 to $13,612First premiums; wholesale lenders often ask for E&O and a fidelity bond
- Lease deposit: $3,000 to $9,000One to three months of rent
- Initial working capital: $15,000 to $90,000Fixed overhead and LO support until the pipeline funds, often several months
Costs start on day one; customers take months. Map the first twelve months of cash so the business does not run out of money while it is getting going.
The business has to earn your pay like any other bill. Set it in your numbers and watch the month it move.
How deals in this business are financed4 lines
- SBA 7(a) loan (Up to 10 yr · 75-85% government-guaranteed)The workhorse for buying an existing brokerage or funding a startup’s licensing, technology, and working capital.
- Seller financing (Often 10-25% of price · 3-7 yr)Common when buying a brokerage.
- Self-funding / working-capital line (Personal capital · revolving line)Because there is no balance sheet to lend off, many owners start on savings plus a working-capital line to carry fixed overhead until the pipeline funds.
- Warehouse line (if you become a lender) (For mortgage bankers, not brokers)Not for a pure broker, but worth knowing: brokers who grow into mortgage banking add a warehouse line to fund loans before selling them.
Most new shops pair an with 10 to 20% of your own cash. Know the monthly payment before you look at a single space.
Before you shop. A lender tells you what they would fund, what they need from you (credit, your cash in, a plan with numbers), and a pre-qualification letter makes a landlord or a seller take you seriously.
- 03Not started0/4Open
Set up the companya day or two
A day of paperwork, and it has to come before the space: a lease, a loan application and every permit are in the company’s name.
Your state’s business name search, the trademark register, and the domain, before the name is on a sign, a van, or a lease.
A , an , and the S-corporation election each change what you keep and what you are exposed to. Compare them with the numbers, confirm with a CPA and an attorney, then file with your state.
After:The is free from the IRS in minutes once the company exists. The bank account needs both. Keep business money separate from day one.
After:Pick the accounting software and connect the bank account now, so every cost of opening is captured and the numbers you later are real.
- 04Not started0/6Open
Find and secure the spaceone to three months
A brokerage has no storefront: your "location" is the lending market you serve.
What decides it for this business: active home-sales market, mid-to-high home values, realtor referral relationships, diverse borrower mix (self-employed, jumbo, first-time), not oversaturated with brokers and bank los.
One call to the planning desk with the address: is this use allowed there, and what will it take (, permits, fire sign-off)? A space that needs a change of use can add months.
Rent, free months for the , who pays for what, the and the renewals, subject to financing and permits. The lender needs this letter or a draft lease to take your application.
After: ,, renewal options, increase caps, what the landlord adds on top of rent, and what happens if you have to leave. For a location business the lease is part of the purchase price.
After:at minimum; property, workers’ compensation and the rest as the business needs. The landlord asks for a certificate at signing and the lender at closing.
Walk the floor plan and the equipment list, then get contractor quotes. The lender wants the quotes; the health department wants the plan.
- 05Not started0/2Open
Get the loanfour to eight weeks
Four to eight weeks with an SBA lender, longer if the file is incomplete. Everything else waits on this, so send a complete file.
Your plan with numbers (download it as a PDF from this page), the company’s papers, the or draft lease, the and equipment quotes, your personal financial statement, and proof of the cash you put in.
After:The lender approves against the ; you sign the lease once approved; the loan closes against the signed lease and the insurance certificate. Ask for the to match the or longer.
After:
- 06Not started0/14Open
Permits and the build-outone to three months
A brokerage is a licensed, regulated business: you handle borrowers’ financial information and originate consumer loans, so NMLS licensing, bonding, and compliance are real barriers, and a moat against unqualified...
Bind the policies you had quoted before a contractor, a vehicle or a customer is in play. Keep the certificates; the landlord, the lender and the city will ask.
After:Your contractors pull the building, plumbing, electrical and mechanical permits and close them out by inspection. Hold the free rent months for this.
After:Most cities approve exterior signs separately; signs take weeks to make. Order early.
Register your or corporation and obtain any city or county operating license.
With your state, before the first taxable sale. Usually free and online; check your state.
Register the brokerage with the Nationwide Multistate Licensing System and obtain the company license in each state you operate.
Each loan originator, including a sponsoring/owning MLO, must hold an individual NMLS license: education, the SAFE exam, and a background and credit check.
A state-required surety bond, with the amount typically scaling to volume.
Approval to broker with each wholesale lender on your panel: the relationships that let you place loans.
Often for lender approval and prudent given the consumer-finance exposure.
Loan Estimate and Closing Disclosure timing and accuracy under TRID, plus state-specific disclosure rules, enforced on every file.
Periodic state regulatory exams and annual NMLS continuing education to keep licenses active.
Fire-marshal review of exits, extinguishers and load, after the build and before the .
After:The city’s sign-off that the space is approved for this use. You cannot open the doors without it.
After:
- 07Not started0/10Open
Set up to runduring the build
During the build, so the business runs from day one: the systems, the prices, the people and the routine.
The backbone: it takes applications, runs files through the lender panel, prices loans, and tracks the pipeline to funding.
License maintenance, TRID disclosure, and audit-ready records keep you legal.
A borrower-facing application portal and a CRM that nurtures realtor and borrower relationships.
A dedicated account keeps commission income, LO splits, and overhead separate from personal money: essential for clean books and any future sale.
See the price the the business needs implies, then check it against what the market pays.
Federal plus state employer and withholding registrations once you hire staff.
After:Wages are the start: , insurance, training time and the hours you stop billing. Owners usually post the jobs a month out and hire two to four weeks before opening so training happens before the doors open.
Early week: Review the pipeline by stage, prioritize loans nearing rate-lock... Daytime: Loan officers take applications, shop the lender panel for the best... Rate drop / refi wave: The phone floods.
Opening, closing, the sale, the complaint, the cash. One page each. This is the manual a franchise would have sold you.
Free, and it is how most people will find you. Address, hours, photos and the menu or price list, live before opening day; then the sign, the soft opening and the first regulars.
- 08Not started0/5Open
Open and measurethe first ninety days
You own it. Now run it on the numbers.
Friends, neighbors and a short menu or list. Find the problems while the room is forgiving.
Enter the real numbers and see every cost line against the for this business.
Loan-officer commission splits; Lead generation & acquisition; Processing & compliance staff.
Growth consumes cash before it produces it. Find the rate your own cash funds before you push.
A brokerage’s value sits in things a will not fully show: whether the producing loan officers will stay, whether the funded volume is durable purchase business or a refi...