Loan Officer’s Commission?

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What is the typical commission rate for a loan officer at Wells Fargo Mortgage or any other lending institution? i.e. On a $ 500,000 mortgage, how much would the loan rep/banker make in commission? Thinking about becoming a loan officer. Anything helps. Thanks

8 Comments
  1. Reply
    supakoo69
    February 8, 2011 at 5:58 am

    At entry level as a junior you would earn a set amount regardless of the amount of the loan. I earned 50 a loan, and a 200 bonus if I hit 5. After about a year or two, you can take a test to become a senior, and then you get all YOUR junior’s loans too 🙂

  2. Reply
    Yanswersmonitorsarenazis
    February 8, 2011 at 6:01 am

    The first answer might apply if you worked at Wells Fargo.

    But if you work for a broker, you could make anywhere from $ 2500-10,000 on a $ 500,000 loan.

    Benefit of working for a big bank like Wells Fargo, you get to feed off their marketing efforts. But because of that, they pay you much less than most broker shops would. But the brokers will pay you only on commission, zero guaranteed income, so they can afford to pay you more when you do actually close a deal, since you cost them little otherwise. And the brokers will more likely require you to find your own business. Which means you might not see a paycheck for a couple months.

  3. Reply
    doublebass@sbcglobal.net
    February 8, 2011 at 6:18 am

    Usually a point would be made off of the borrower,1% is a point. Or if any is charged off the front because you can, typical loan works that way. 1 in the front and 1 in the back(through the loan). So if you can get a cut of that, $ 5,000 or even $ 10,000 a deal off of 500k, tough industry to get into right now. But you can do the math. Maybe when you get your lisence you can use those calculations, in the mean time you will have to learn how to get someone there coffee too! They will be able to tell you how much you are getting if you go un licenced.

  4. Reply
    Amy E
    February 8, 2011 at 6:44 am

    I work for a mortgage broker and I receive 60% commission. On a 500,000 mortgage, or actually any loan, we try to receive 3% of the purchase price. Normally, 1% origination (paid by the borrower/buyer) and 2% yield spread (normally paid by the lender). In the event that the lender doesn’t pay any yield spread, I have charged 3% up front. This means that on a 500,000, and at 3% the revenue with an application or broker fee would be 15,000. My company takes 40%, leaving me $ 9,000. This is the best case scenario.

    I have heard some people complain about paying the 3% origination, and that it is predatory lending, but I don’t agree. I work hard for the money that I make, and nothing is free. Plus, as a loan officer I am an independent contractor, and have to pay for all my own office expenses.

    In the event that the borrower absolutely refueses to pay 3%, I will lower the origination to 1.5% IF I still want to do the loan. Sometimes buyers are very rude and want everything for nothing (no down payment, low interest rate, etc.) I give them the choice of a lower interest rate, a down payment, higher orgination, etc. No one gets everything…I do not work for free. And processing a loan takes a lot of finesses and work for some clients.
    So, even if I only end up with 1.5% it is something that helps pay the bills.

  5. Reply
    Jamie B
    February 8, 2011 at 7:39 am

    A loan officer’s commission is based on the commission split offered by the broker/lender/bank you work for and the number of points you charge to do the loan. 1 point is 1% of the loan. Example: 500K loan, you charge 3 points (average charge). Your fees or “origination” is $ 15,000. This is where your commission comes from. Now your broker has a pre-determined commission split for you. Most new officers start at 30%. So, 30% of 15K is $ 4,500. This means the other 70% goes to your “boss”, which technically you don’t really have usually because you’re an independent contractor in most cases. Unless, you work for a company that makes you a W2 employee, which means they give you a set “salary” called a draw plus commissions. In this case, the company pays you what can be considered an “hourly” wage (but it’s not really). This is just $ to keep you afloat until your loan(s) close. Once your loan closes, your commission is what you made on the loan MINUS what they paid you “hourly”; your draw check I mentioned earlier. Loans can be closed, or get to document signing, in as little as a few hours to 45 days. Hope this helps and is not too confusing. Good luck!

  6. Reply
    james
    October 16, 2012 at 12:31 pm

    Each one of you are idiots. Not one of you correctly answered this mans answer correctly. I can tell all of you are new LO’s. Wells Fargo pays in basis points.

    • Reply
      Teddy Lopez
      April 25, 2013 at 8:04 pm

      That’s hilarious!! That’s what I was Thinking…

    • Reply
      Bob
      January 27, 2013 at 2:49 am

      james is such a douche

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