Mortgage Banking Firm Business Plan and SWOT Analysis

Mortgage Banking Firm Business Plan, Marketing Plan, How To Guide, and Funding Directory

The Mortgage Banking Firm Business Plan and Business Development toolkit features 18 different documents that you can use for capital raising or general business planning purposes. Our product line also features comprehensive information regarding to how to start a Mortgage Banking Firm business. All business planning packages come with easy-to-use instructions so that you can reduce the time needed to create a professional business plan and presentation.

Your Business Planning Package will be immediately emailed to you after you make your purchase.

Product Specifications (please see images below):

  • Bank/Investor Ready
  • Complete Industry Research for the Industry
  • 3 Year Excel Financial Model
  • Business Plan (26 to 30 pages)
  • Marketing Plan (24 to 28 pages)
  • 425+ Page Funding Directory
  • PowerPoint Presentation
  • Loan Amortization and ROI Tools
  • Three SWOT Analysis Templates
  • How to Start a Business Guide
  • Easy to Use Instructions
  • All Documents Delivered in Word, Excel, and PowerPoint Format
  • Meets SBA Requirements

Mortgage banking firms can be highly lucrative financial institutions given that they are able to use third-party capital via a warehouse line of credit in order to issue mortgages in their own name. Mortgage banking firms have the ability to generate revenues not only from interest from held mortgages but also from the sale of new and seasoned mortgages to institutional buyers. As such, these companies are able to remain profitable and cash flow positive in almost any economic climate given that they are able to receive monthly mortgage and interest payments coupled with having their entire investment collateralized by real property. The startup costs associated with a new mortgage banking company are moderate. Most states require that a minimum net worth of $250,000 is held in the companies account at all times. Usually, a third-party financial institution will provide leverage of 10 to 15 times the net capital held by the mortgage bank. Almost all mortgage banks use a warehouse line of credit in order to be able to issue mortgages on a continuous basis. However, some mortgage banking firms will use private investment capital in order to have these mortgages closed. This is especially true if the mortgage bank is issuing nonconforming loans.

In order to obtain a warehouse line of credit or in private investment to start mortgage banking operations a business plan is almost always going to be required. This business plan for a mortgage bank should include a three year profit and loss statement, cash flow analysis, balance sheet, breakeven analysis, and business ratios page. Special attention within the business plan should be paid to the ratios of leverage that will be used by the organization on an ongoing basis. The over leverage that was seen from 2004 two 2008 caused a substantial recession within the worldwide economy. As such, lending standards have changed drastically in order to ensure that a repeat of the scenario does not happen again. Within the business plan as well a detailed procedures and protocols manual should also be included as it relates to issuing mortgages to individual borrowers, corporate borrowers, and specialized real estate developers.

Once the business plan is developed then it is time to focus on the mortgage banking firm marketing plan. Given that there are tens of thousands of both mortgage banking firms and mortgage brokerages it is imperative that a wide-ranging marketing plan is developed. Foremost, many entrepreneurs that are looking to enter this field already have extensive relationships with real estate developers as well as real estate agents. One of the best ways to immediately produce income is through ongoing relationships with real estate agents that will refer their buyers to your mortgage banking business. Of course, it is also imperative that a large-scale website that is properly search engine optimized is also developed. One of the ways that many newer mortgage banks launch their operations is through the use of pay per click marketing. This ensures that immediate traffic is driven to the mortgage banking firms website. Beyond these proprietary marketing strategies – many of these organizations will frequently have significant presences on social media platforms such as FaceBook, Twitter, and Google+. As this is one of the ways that people drive traffic to their website it is imperative that a social media presence is maintained. In fact, many larger mortgage banking firms will frequently have a social media consultant on retainer in order to manage these platforms on the half.

Once this documentation is done, many people will conduct a mortgage banking firm SWOT analysis. This document outlines the strengths, weaknesses, opportunities, and threats are commonly faced by mortgage firms. As it relates the strengths, a mortgage banking firm will generally be able to produce extremely highly recurring revenues from interest, close loan fees, and sales of mortgages to third parties. Additionally, these businesses benefit significantly from economies of scale and they have high barriers to entry. For weaknesses, the these businesses are highly subject to fluctuations in the interest rate and economy as a whole. During times of economic recession or spiking interest rates the number of closed mortgages tends to decrease dramatically. However, this risk can be ameliorated by the recurring streams of revenue that are generated from interest payments on a monthly basis. For opportunities, most mortgage banks expand by increasing their liquid net capital all concurrently requesting larger amounts of funding through their warehouse lines of credit. For threats, like any other financial business there is ongoing changing regulations that impact the way that these companies are able to provide their services to the general public. As such, a compliance officer should be hired in order to ensure that the mortgage bank is operating within the letter of the law and is issuing mortgages that are in compliance with both state and federal regulations.