How to Reverse Engineer a $10M Month as a Mortgage Broker
Sam Panetta breaks down the numbers that matter most in a mortgage business, and shows how to build from a $2M month up to $10M by working the levers you can actually influence.
A $10M month at a $500k average loan is 20 settled deals. Sam works backwards from there to the leads, conversion rates, team and tech you need to get there.
1) Start with the four core KPIs
Every mortgage business runs on four numbers.
- Leads gotten.
- Strategies presented.
- Applications lodged.
- Deals settled.
2) What counts as a real lead
A lead has to meet three criteria. If any one is missing, it’s a prospect, not a lead.
- Full name and a way to contact them.
- Two-way dialogue.
- Intent to do business.
3) Strategies, lodgements and settlements
A strategy only counts as presented if there’s a logical next step: “Mr and Mrs Client, you should go with XYZ bank for ABC reasons.” Lodged is when you hit submit to the bank. Settled is when the deal is done.
- A strategy needs a clear next step.
- Lodged means submitted.
- Settled means done.
4) Example: reverse engineering a $2M month
At a $500k average loan, $2M a month is four settled deals. To settle four you need to lodge five, present six strategies and get 10 leads.
- Around 60% from leads to strategies.
- Around 90% from strategies to lodged.
- Around 90% from lodged to settled.
- About 40% from lead to settled overall.
5) Settlements are a lag indicator
The settlement number at the end of the month mostly reflects the activity you did to get there. Focus on the lead indicators you can influence.
- Settlements show past work.
- Manage the lead indicators.
6) The three levers you control
There are three things in the numbers you can actually influence.
- Leads at the top of the funnel.
- Conversion rates at each step.
- Average loan size, which tends to stick close to your niche’s norm.
7) Leads are the biggest lever
Conversion can’t go above 100%, and average loan size has a gravitational pull. The lever with the most influence, by far, is the volume of leads you put into the top of the funnel.
- Fix conversion only if it’s a real problem.
- Lead volume moves the needle most.
8) Milestones from $4M to $10M
Set targets in $2M steps over four quarters: $4M, $6M, $8M, then $10M. Activity today takes about 90 days to flow through to settlements.
- Four milestones over 12 months.
- Allow around 90 days for activity to settle.
9) What $10M actually takes
At a $500k average, the milestones need 8, 12, 16 and then 20 settled deals a month. At roughly 40% conversion, 20 deals means around 50 leads a month.
- $10M = 20 settled deals.
- Around 50 leads a month.
- The conversion maths is more art than science.
10) Build team and tech alongside lead flow
More leads bring more workload at every stage of the funnel. Get the lead flow first, then build the team and technology to handle the extra work as you hit each target.
- Lead flow comes first.
- Workload grows at every stage.
- Scale team and tech with it.
The simplest version of the playbook
Track the four KPIs, define a real lead, focus on lead volume as your biggest lever, and build team and tech in step with each milestone on the way to $10M.