When learning how to become a mortgage broker in Texas, you will need to follow these steps. Here is everything you need to know
If you want to become a mortgage broker in Texas, you will first need to obtain a mortgage broker license.
In The Lone Star State, there are two entities that regulate mortgage brokers. These are the Office of the Consumer Credit Commissioner and the Department of Savings and Mortgage Lending. Both have requirements that you will need to meet if you want to get a license.
In this article, we will break down the basics of how to become a mortgage broker in Texas. We will also take you through the required steps to obtain a broker’s license. Here is everything you need to know.
When figuring out how to become a mortgage broker in Texas, you will first get your Texas mortgage company license. You will need this in order to work at or operate a mortgage brokerage business. Companies that get this license guarantee their clients that they meet all federal and state requirements.
To work as a mortgage broker in any state, there are federal requirements and guidelines. However, most states also set their own criteria. This is why getting a mortgage company license in Texas is different than getting a license in any other state.
If you are a mortgage loan originator who will be working with residential real estate, you would get your license from the Department of Savings and Mortgage Lending. Those licenses account for most of the applicants of mortgage company licenses.
Working with other types of loans, however, usually required a license issued by the Office of the Consumer Credit Commissioner. Those other types of loan include manufactured housing loans and residential property tax loans, for instance.
Now that we have the background, let’s look at the basics of how to become a mortgage broker in Texas:
- Educational requirements
- NMLS requirements
- Maintaining a license
Here is a closer look at each of the basic steps to becoming a mortgage broker in Texas.
1. Educational requirements
The process of becoming a mortgage broker in Texas is completed on the National Mortgage Licensing System (NMLS), regardless of the agency you go through for licensing. You also need to complete the process on the NMLS if you want to become a loan officer in Texas.
The first step is ensuring you have met all the pre-license educational requirements for getting a mortgage company license in Texas. If you are applying through the Department of Savings and Mortgage Lending, the requirement is 23 hours. If you are applying through the Office of the Consumer Credit Commission applicants, the requirement is 20 hours.
Before enrolling in any classes, it is critical that you check with each agency about their requirements. Both agencies require that certain topics be included in the electives offered.
Additionally, federal law requires that all mortgage loan originator applicants successfully finish 20 hours of education through SAFE courses. These can be taken after you complete the state-required pre-license education.
2. NMLS requirements
The next step is to work on all the activities you need to complete through the NMLS portal. In addition to any state licensing exams that are required, you must pass the NMLS SAFE mortgage licensing exam. Taking NMLS practice tests can help set you up for success.
After passing the exams, you will complete your state and NMLS license applications. These include the following components:
- Financial statements
- Company formation documents
- Business plan/organizational charts
- FBI/state criminal history/background checks
- Credit reports
A lot of the documents and applications require a fee. The estimated fees include the following:
- Department of Savings and Mortgage Lending application: $479 for loan originators; $275 for a mortgage company license
- Office of the Consumer Credit Commission application fee: $325
- NMLS application fee: $30
- FBI Criminal Background Check: $35.25
- Credit report: $15
4. Maintaining a license
Now, you are ready to start work. Keep in mind, however, that you must complete activities to maintain your license. Regardless of the firm or company you work for (if any), you should keep your NMLS account valid—with up-to-date contact info.
License holders are required to finish eight hours of continuing education each year to maintain their license. They should also renew the license on Nov. 1 every year. It is crucial to check NMLS for information on what is necessary for renewal prior to that deadline.
Yes, mortgage brokers need a license in Texas. There are two licensing bodies that regulate mortgage brokers in the state of Texas. One is the Officer of the Consumer Credit Commissioner (OCCC) and the other is the Department of Savings and Mortgage Lending.
Residential mortgage loan originators (RMLO) usually have to obtain a license from the Department. If, on the other hand, you want to work with certain types of licenses, you might need an OCCC license. These might include the origination of the following:
- Home-equity loans, which will not be necessary if you are already licensed with the Department
- Manufactured housing loans
- Residential property tax loans
- Secondary loans, which won’t be necessary if you are already licensed with the Department
Note: you must complete the application through the NMLS for both licensing processes. The NMLS handles and processes the forms and documents.
If you want to obtain your mortgage broker’s license in Texas, you must take a course designed by the Texas Real Estate Commission (TREC) and pass the final exam. Additionally, you must have four years minimum of active experience as a licensed real estate agent within six months prior to sending your application.
Once you meet these requirements, these are the steps you need to take to get your mortgage broker license in Texas:
- Finish 270 hours of pre-license education
- Meet experience requirements
- Apply to become mortgage broker in Texas
- Pass background check
- Pass Texas real estate broker exam
To better prepare yourself, let’s take a closer look at each of the steps to becoming a mortgage broker in Texas.
1. Finish 270 hours of pre-license education
Because finishing 270 credit hours of pre-licensing education is a requirement, you will need to take the following courses:
- Principles of Real Estate I
- Principles of Real Estate II
- Law of Agency
- Law of Contracts
- Promulgated Contracts Forms
- Real Estate Brokerage
- Real Estate Finance
- Real Estate Marketing I: Building a Real Estate Practice
- Real Estate Property Management
There are, however, more education conditions you must complete. To apply for your mortgage broker’s license in Texas, you must also finish another 630 credit hours of TREC-approved continuing education courses or qualifying education classes. Here is a look at the approved courses:
- Real Estate Appraisal
- Real Estate Law
- Real Estate Marketing
- Real Estate Math
- Property Management
- Real Estate Investments
- Residential Inspections for Real Estate Agents
If completed from an accredited university or college, a bachelor’s degree or higher may satisfy these requirements. After applying, you must submit a copy of your post-secondary transcript to the TREC.
2. Meet experience requirements
There are specific requirements you must meet if you want to become a mortgage broker in Texas. For each candidate, here are the basic requirements:
- You must have at least four years' experience as a licensed real estate agent no longer than 60 months (about 5 years) prior to filing
- That experience has to total 3,600 points and be added to the Qualifying Experience Report for a Broker License.
3. Apply to become mortgage broker in Texas
When you meet the requirements, you can apply online for your mortgage broker license and pay the required fee.
To log in to submit your application, use your TREC-registered username or Texas Appraiser Licensing username and Application Board (TALCB). If you don’t have an account, you can register using the same link. Alternatively, you can submit your application through the mail.
4. Pass background check
You must pass a background check to be a real estate broker. You are required by law to have your fingerprints on file with the Texas Department of Public Safety. If there is an investigation into your background, you can expect a delay in your application.
5. Pass Texas real estate broker exam
The final stage of acquiring your mortgage broker license in Texas is to pass the exam. When preparing for your mortgage broker license exam, it is crucial that you study hard. Why? Because you only get three attempts to pass. If you fail the exam after three attempts, you have to undergo further education.
Mortgage brokers are essential to the mortgage industry, in Texas as elsewhere, helping families and business owners along their way to purchasing the property that will make their dreams come true. When determining how to become a mortgage broker in Texas, you may run into challenges in the application process. However, there are also many perks and benefits once you are licensed.
Remember: the more knowledge you have, the better off you will be.
If you're truly interested in becoming a mortgage broker in Texas, or anywhere, take the time to look at the mortgage professionals we highlight in our Best of Mortgage section. Here you will find the top performing mortgage professionals, including mortgage brokers, across the USA.
Did you find these tips on how to become a mortgage broker in Texas useful? Have you recently earned your mortgage broker license in Texas? Let us know in the comment section below.