What is a mortgage license

Individuals who wish to offer services as a mortgage broker are required to obtain a mortgage license. A mortgage license is an important acquisition as without it, you cannot become a legally licensed mortgage provider and therefore cannot issue mortgages.

Mortgage licensing explained

A loan that is issued by a bank or financial institution that enables individuals to purchase property is referred to as a mortgage. This type of loan acts as a legally binding financial contract that is only issued to individuals who agree to pay it off through fixed installments over a period of time. Each mortgage is issued under different conditions and for different time periods depending on the value of the property and the individuals’ income, however they will all be issued within the constraints of the mortgage license regulatory authority.

The financial regulatory authority of the jurisdiction issues the mortgage license to qualified financial institutions. A mortgage license is a specific type of license that aims to provide mortgage services, whether it is a mortgage loan, a real property grant of a mortgage deed. Any bank that issues mortgages is obligated by law to have a mortgage license.

A mortgage license protects the interest of both the consumer and the broker during the buying and selling stage of the desired property. Therefore, a mortgage license is an important acquirement as it ensures complete security and protection and permits the issuance of mortgages under rigid legal requirements. Financial institutions and banks that fail to obtain a mortgage license are not legally permitted to issue mortgages as issuing mortgages without a license is prohibited by law.