Is it possible to have no fee mortgage broker?

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I show a good faith estimate not affect the cost of online mortgage broker, 808. He said, compensation for brokers by lenders (not paid by the proceeds of the loan applicant). I talked to another mortgage broker that does not require the lender to collect us, and brokers said. He says they will say the closure, we need to get a higher salary. He claims 660 million dead. Agency fees. Any idea if it is correct? or we could really not have to pay brokerage fees?

2 Comments
  1. Reply
    src50
    May 1, 2011 at 2:17 am

    Technically, it may be true. But then the lender is just adding that into it’s own costs.

  2. Reply
    biggaaron
    May 1, 2011 at 2:56 am

    The purpose of the GFE is to disclose the estimated costs of the loan prior to getting a loan. If he is going to charge you, he needs to let you know before you go to closing.

    But mortgage brokers can make money in three ways:

    1. Charge a mortgage broker fee (on line 808), or
    2. Be compensated by the lender (which is what you have)
    3. A combination of the two

    When a mortgage broker is figuring out your rate, he is looking at the pricing of a specific rate. For instance, 6.5% may be the par rate, or the rate at which there is no discount and no rebate to the broker. However, if he instead gives you a rate of 6.75%, he may get a rebate of, say 1%.

    Some brokers will give you the lowest rate (par or even lower) and charge you an upfront mortgage broker fee. Others will charge you a smaller amount and make the rest on the “back end.” Still others may charge you nothing, but give you a high enough rate to still make money on the back.

    If you were to go to another broker, they may give you a better rate but charge up front. It’s not a bad thing necessarily. If the higher rate only costs you another $ 10/month, but saves you $ 3000, that’s comparable to paying the same amount for the first 25 years (3000 / 10 is 300 months, which is 25 years) of your loan, ie, it would take 25 years at the lower rate before you actually start saving money compared to that higher rate.

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