Ive been managers at a bank over loan officers. Ive been a loan officer at a bank. We paid our loan officers 50-75% of the Loan Origination Fee. Thats it. Its a high turn over job. The reason being is because they are only working for the bank for free training so they can become a broker or work for a broker.

The company I work for is 100%. I pay them a small fee 250-450 dollars per loan. I just use their name.

So to give you the bank example. The bank will price the loan for approx 1.5% YSP and charge a 1% origination fee. Ill pick on wells fargo. If you work at wells fargo as a loan officer and you are new on a 200,000 loan you will get 1/2 of the origination fee. So you made $1,000.

Where I work, Wells Fargo will pay me as a broker 2% YSP, and I take 1% origination. I would as a broker make $6,000 minus 350 bucks I pay the broker.

Brokers can get better deals then the retail side of the bank offers their own clients. The reason is simple. Banks normally will give better rates to the brokers then to their own loan officers. Ive worked on both sides. The reason is because brokers do 95% of their business.

I have a friend that works at say *Bank A* Large Bank. She is a loan officer at *bank A*. She hasnt trained enough to be on her own. She is working on it. She was doing her own loan and *bank A* was waiving the Origination fee because she worked there. She did it through me, and we took it back to wells fargo. Why? Because I still make 3,000 and she saved 1,000. Even though she worked there. She couldnt even come close with her rate sheet to what I was doing. Same bank.

There is alot you will learn over time.

1% of the loan price!!!!!!

Its all negotiable. Our mortage broker waived alot of his fee because he was a family friend so clearly it can be done.

The norm is around 1% of the price.

When you go to the bank your paying retail rates.

When you use a Mortgage broker you get wholesale rates.

Most of the major banks have what’s called a WHOLESALE division that deals strictly with mortgage brokers. The rates are usually on average of about 3/4 of a point better. So instead of maybe getting a 7% rate at the local bank branch, you could use a mortgage broker and obtain the same loan through the WHOLESALE division of the same bank at around 6.25% normally.

Now Mortgage Brokers are paid by the borrower on what’s called the MORTGAGE BROKERAGE FEE (front end), AND also from the bank on what’s called the YIELD SPREAD (back end) which is why you don’t normally see that 6.25% example wholesale rate, because the mortgage broker is paid a certain amount for anything over the 6.25% that you agree to. These people who posted before me and are saying Mortgage Brokers only make 1% are WAY OFF, trust me. Banks will usually charge arund 1%, but your paying the retail interest rates. I just obtained my mortgage brokers license and most companies I interviewed with try to make atleast 2-4% on average either in the front or the back of any loan or refinance. I’ve seen Mortgage Brokers make as much as 7% on loans when I first started as a Real Estate Agent, that’s what made me go get the additional Mortgage Broker license.

My personal suggestion would be go to a Mortgage Broker preferably ME , but if not that’s ok, and tell them you want the PAR rate but you’de be willing to pay them a 2% mortgage brokerage fee to obtain it. The PAR rate means that the Mortgage Broker is NOT receiving a YIELD SPREAD on the backend of the loan from the bank. You will be amazed at the rate you can get and most Mortgage Brokers will do this for you because you’ll sound like you know what you’re talking about.

So I hope this helps,
Please don’t stone me fellow Mortgage Brokers ..lol
Harry J. Misner
888-352-8199 ext #1

Usually go through a broker if you have terrible credit and/or cannot get financing through a bank. They charge a small more but your guaranteed a loan because they are in touch with banks all over the country. The broker does all the work for you. Just make sure you question alot of questions and are informed of all costs before signing anything because some brokers will rip you off or try and change the conditions at closing. You legally have three days after signing to change your mind.