What portion of a loan origination fee does the mortgage broker keep?

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A Loan Origination Fee is defined as: the points that you pay the lender for extending you a loan. A point equates to 1% of the mortgage loan balance; e.g., $ 100,000 at 2 points equals $ 2,000. My question is a mortgage broker usually gets paid based on the size of the loan and they are known as the originator… so why would the lender get this money if it is called a loan origination fee.. so confusing…

  1. Reply
    January 20, 2011 at 5:17 am
  2. Reply
    I had my baby boy 12/19!
    January 20, 2011 at 6:01 am

    I think it’s all so arbitrary now! It’s just everyone trying to get paid and I hate it. My lender said that he is paying for 1/2 of 1 of our points out of his own pocket. Why is he doing this?
    sorry to answer the question with more questions…

  3. Reply
    January 20, 2011 at 6:01 am

    So how much do you make?

  4. Reply
    lonnie w
    January 20, 2011 at 6:51 am

    Lenders make money on two things. Origination points/ Discount Points and the interest rate that they give you. So sometimes in order to get really low rates mortgage brokers charges points upfront in order to make up for the loss of giving you a low rate. There is a minimum that mortgage brokers need to make on every loan. They can’t do it for free because there is always a cost for doing loans. Many brokers require that 1 point be made total either on the front of the loans by charging points or by giving a higher rate. Call up your broker and ask for the rate with no points you might like that option instead. Rates are so low right now that it does make sense to pay points. The mortgage broker ususlly keeps half of the fee. Sometimes less.

  5. Reply
    January 20, 2011 at 6:54 am

    The broker does not get the loan origination fee per se. The lender is the loan originator, the broker just gets a cut. This is an article that has some good tips on how to get a good broker and it some good resources too.

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