If you are in the market for a home loan, you might have heard about how mortgage brokers make money. This is not new information. The brokers actually make money from the mortgage lenders who approve their clients’ loan applications. Here are some tips to help you learn more about how a mortgage broker makes money with Home Team Mortgages.
The first way that brokers make money is by securing you as a client and helping you secure your mortgage loan with a competitive fixed-rate interest rate. Home Team Mortgages actually offers several different mortgage plans for their clients, including Mortgage Plan 1, Mortgage Plan 2, and Mortgage Plan 3. Depending on the mortgage plan you choose, your mortgage broker will be able to secure you a certain interest rate.
If you need to know how does a mortgage broker makes money with a loan, consider the commissions that the brokers earn from the mortgage companies. The commission varies from broker to broker and can be anywhere from two percent to six percent of the loan amount. If the loan is originated with a mortgage company, your mortgage broker will get paid by the mortgage company. However, if the loan is originated with a title company or the bank, your broker will receive their cut only from the mortgage lender. Either way, it will be their duty to make sure that you have chosen a good mortgage company that will honor your loan obligation.
Mortgage brokers also make money when they send out marketing material about the loan program. These mailings typically include a free mortgage calculator, a rate quote, and information about how much the home would cost with various terms. Although you may not think that there is a lot of money to spend on mailings, there is a reason. Brokers have to pay the postage for the brochures. In addition, there is a time period for the mortgage company to respond to the mailer. In short, the broker has to make money even while you are waiting for your response.
Another way that your broker makes money is when they secure you as a client. This usually happens when the first loans are made and the money is rolling in. You will have to meet certain criteria in order to qualify as a broker and these include having a college degree and working in the industry for at least two years.
Although you probably didn’t choose to work as a mortgage broker for a direct lender, you can find plenty of opportunities on the Internet. There are many brokers who provide mortgage services through affiliate programs or for referral fees. Many Internet sites offer mortgage referral services for a fee and this type of arrangement is usually less expensive than using a broker directly.
The most difficult question to answer about how does a mortgage broker makes money is how much the commission varies from lender to lender. Usually, mortgage brokers have a fixed rate that they charge for each loan that they refer. This will be the prime rate that the lender will base the amount of your loan on. This can make it difficult to determine how much of a mortgage broker is making, but there are a few good sources available to help you get the numbers. The Annual Percentage Rate (APR) is the one thing that you will commonly find with mortgage brokers; however, there are many different rates that are offered by lenders.
One thing that you do need to be aware of is that the mortgage broker may refer you to lenders that actually make money on the loans they provide, but not all of them will do so. It would be best if you asked how does a mortgage broker makes money to make sure that you aren’t getting a commission that is based primarily on referrals. There are plenty of legitimate mortgage brokers out there so don’t be afraid to ask how they make money.