Mortgage companies choose to pay their brokers in a variety of ways. Some mortgage brokers receive salaries based on their experience and performance. Others receive a percent of the mortgages they lend to clients. Understanding how mortgage brokers get paid could help you choose a professional who meets your needs best.
Front-End and Back-End CompensationMost mortgage brokers get paid through commission. That means they get a small piece of the mortgages they sell to clients. There are, however, two primary ways for mortgage brokers to get paid through commission. Front-end compensation uses various fees to make sure the broker gets paid. These fees come directly from the borrower. In fact, borrowers can ask for itemized lists showing what fees they have to pay the broker. A professional shouldn’t balk at such a request. It’s perfectly reasonable for borrowers to want to know where their money goes.
Some of the fees that pay the broker are called
- warehouse fee
- processing fee
- origination fee
- underwriting fee
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