What would the mortgage broker fees be?
I have an option of getting a loan througn my bank with closing costs of 2300-2400 or maybe going to a mortgage broker in hopes of getting a better rate. How much does one usually have to pay the broker for his/her services….or how exactly DO mortgage brokers get paid????
Loan size will bearound 115,000
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The Lender pays the mortgage broker. But generally speaking the best fees are when you walk into the bank and get your loan over the counter. Since they often charge you a higher interest rate they can afford to have low fees. So it all balances out in the end.
Closing costs can vary considerably as can the interest rates you will get. Call brokers in your area and ask them what loans they have available and what their closing costs will be. They will usually be upfront about it. Frequently brokers will charge 1/2 to 1%. Always consider that a broker and the bank have only thier interst in mind. They will give you the loan that makes them the most money. Take a look at bankrate.com , plug in your numbers and see how low a mortgage you can get. I have refinaced through lenders on this site twice and both times gotten a much better loan than what was available at the local market.
This is an excellent questions. I’m glad you acknowledge that Mortgage consultants do not work pro-bono. Well 2300 is not bad depending on how much your rate is . The way loan officers make money is that an honest loan officer will usually charge 1 point to the client and 1 point to the lender. So based on that your loan fee seems about right. I hope this helps , good luck. By the way make sure that they are not placing a prepayment penalty or that you interest is fixed for at least 4-5 yrs.
If you have excellent credit, a reasonable fee for that loan size is 1%. There are usually other fees involved that you may not see at the bank, however. For example, you may be charged processing fees, underwriting fees, etc. If you are quoted “no origination fee”, the broker is making it in the rate (and is being paid by the lender). This just means that you’re not getting the lowest rate possible – the broker will make money one way or another.
One of the people who answered this question said to just go to the bank, because their fees are in the rate and “it all balances out in the end” – this is not necessarily the case. If the rate is lower with the broker and the closing costs are reasonable, it’s usually better to pay the lower rate, because a higher interest rate over 15 or 30 years costs MUCH more than a 1% origination fee. If you are planning to keep the loan for several years, pay the origination fee and get the lower rate – it’s worth it in the end.
You won’t pay any more through the broker than you will through your bank. Comparing apples to apples, i’d bet the farm that the mortgage broker will find you a loan with lower rate and fees than the bank will.
your mortgage broker is going to charge you money. whehter it’s an up-fonrt fee, or they take it onthe back-end. generally, 1-2 % of your loan amount…if they are taking anything more than that….they are screwing you