How and When Do Mortgage Brokers Get Paid?

Plenty of people find themselves asking ‘how do mortgage brokers get paid’. These financial specialists are more than capable of saving their clients thousands of dollars potentially and when applying for home loans – but they certainly won’t work for free. So, how is it that they get paid and when do they receive this payment exactly?

This depends on the type of mortgage broker

There are two main types of home loan brokers these days – those that work with particular lenders and banks, and those that work outside of this type of framework. If a broker works with banks, the chances are that they will receive commission from the lender; but only if they are able to get a borrower on board with a particular deal or lending package.

For instance, if a mortgage broker works with 10 different lenders, then they will be able to compare the features and deals offered by those 10 institutes to help their client find the one that is right for them. And if their client goes ahead with one of the deals – then the broker will receive commission. This commission will usually be a percentage of what the borrower received from the bank in the form of a loan.

Furthermore, further commission can be paid whenever a repayment is made by the borrower; allowing the broker to receive payment for their services well into the future. This can help to ensure that they go above and beyond when it comes to providing high-quality services to their clients.

The other option

Any broker that doesn’t work with a bank may charge a flat fee to the borrower if they decide to go ahead with their services. This fee will usually be a one-off payment and it will encompass the costs associated with the broker searching for compatible loans, comparing their features and their interest rates – and then helping their client to decide on the loan that’s right for their needs.

These brokers are often considered far more client-minded and so can be very popular, but as both types will strive to get paid, it’s safe to say that whichever specialist you go for; they should have your best interests at heart throughout your application process.