Mortgage Broker Commissions
Timothy J. Lee
commissions?
It seems that around here (bay area in California), 1 point is
fairly common, though there are many who charge more and a few
who charge slightly less (e.g. 0.875 point).
Note that in cases where a no-point loan are involved, the lender
is actually making it at negative points to pay the commission
(and closing costs, if the loan is also no-fee). This comes with
a higher rate than a loan with points.
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Timothy J. Lee tim...@netcom.com
No warranty of any kind is provided with this message.
Dan Hepner
From: tim...@netcom.com (Timothy J. Lee)
>What type of range does one usually find for mortgage broker's
>commissions?
>
>It seems that around here (bay area in California), 1 point is
>fairly common, though there are many who charge more and a few
>who charge slightly less (e.g. 0.875 point).
Regardless of the points charged, the brokerage firm is making at
least $2k, and on any ordinary loan will probably be very pleased
with $3k, but some of course will make $4k if they see a chance.
This money comes from a combination of two sources, the points charged
and rebates from the lender; the lower the points, the more from the
lender, and vice versa. Of course, the rebate is based on the interest
rate being higher.
New laws require the actual amount to be disclosed to the
borrower, so that you can see for yourself. Perhaps related,
most brokers will discuss how it works if you ask them.
Zero cost loans have the advantage that you can refinance again
without significant penalty should rates drop further.
Dan Hepner
Timothy J. Lee
|
|From: tim...@netcom.com (Timothy J. Lee)
|
|>What type of range does one usually find for mortgage broker's
|>commissions?
|>
|>It seems that around here (bay area in California), 1 point is
|>fairly common, though there are many who charge more and a few
|>who charge slightly less (e.g. 0.875 point).
|
|Regardless of the points charged, the brokerage firm is making at
|least $2k, and on any ordinary loan will probably be very pleased
|with $3k, but some of course will make $4k if they see a chance.
I was not asking about the points charged the buyer, but the
amount the broker makes (i.e. many mortgage brokers make 1 point
on every loan, regardless of what points the buyer pays).
Perhaps the names of those willing to work for a smaller commission
would be useful to some people.