How Much Does it Cost?
Mortgage professionals work for you, and not the banks; therefore, they work in your best interest.
From the first consultation to the signing of your mortgage, our services are almost always free.
A fee is charged for the most time-consuming and/or challenging credit solutions, and it’s especially under those circumstances that a mortgage professional can do for you what your bank cannot.
Brokerage Fees & Compensation:
Mortgage brokers typically do not have to charge you any fees. However, there are times when that may be necessary. Fees are based on the application itself. We will illustrate them below:
1) Finders Fee: This is the most typical way a mortgage professional gets paid. A lender will generally pay a mortgage broker a percentage of the mortgage amount as a finders fee. The amount of the fee can range from 0.5% to 1.5% with the average being about 1%. For example, if a client was to borrow $300,000.00 – A mortgage professional would likely receive 1% or $3,000.00 as their finders fee.
2). Lender Fee: Some lenders charge their own fee on top of the mortgage. These lenders usually specialize in borrowers who have bruised credit, or their applications require special exceptions. These lenders will charge a fee of 1%-3% and pay the mortgage professional a portion of that fee (usually 50%).
3). Broker Fee: Sometimes a mortgage broker will need to charge a fee if they are using a private lender or a financial institution that doesn’t have a finders fee agreement with the brokerage. For example a major bank, credit union, mortgage investment corporation, or private corporation. These fees are set by the broker and agreed upon by the client. Typically fees are between 1%-3% and have a minimum of usually $2,500.00. If a broker/brokerage fee is charging a fee, it will be fully disclosed before you sign the mortgage commitment and be disclosed on the borrower’s disclosure.
4). Cash-Back: Many lenders have a cashback program for their clients. Cashback is also a way that the mortgage professional can receive compensation in lieu of a lender fee or broker fee. In this case, the lender will pay the broker 1% of the funded mortgage amount and increase the rate to the borrower by .2% or .25% depending upon their policy. The increase in the interest rate is what compensates the broker and is paid over the term of the mortgage. With this type of mortgage, it is important to understand that the mortgage penalty will also include a pro-rated portion of the cashback.
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