Question:

How do mortgage brokers get paid?

Answer:

Well, mortgage brokers get paid out of borrowers' money and the commission from the wholesale lender. If the mortgage broker chose to disclose their fees and the wholesale rate, it is a good sign that the broker is following fair practices. If the broker refuses, the borrower should consider going to another mortgage broker.

Mortgage brokers get paid from the difference between the rate the client pays and the rate offered for the loan by the wholesale lender. They can go up or down with the broker fee (origination fee) as long as it is still above the wholesale lender rate. Commonly, mortgage brokers get paid 1 to 2%.

Origination fee is often open to negotiation and if the mortgage broker ask that borrowers sign an agreement to work with them only, borrowers could try negotiating the broker fee. Often it is in their best interest to work on exclusive terms with one mortgage broker only.

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Common misspellings: mortage and morgage