How does a mortgage broker get paid?

What's the difference between lender-paid and borrower-paid?

Lender-paid: the lender pays the broker's compensation as part of the loan. You don't write a separate check for it, but it's built into the pricing of your loan.

Borrower-paid: you pay the broker's fee yourself at closing, or the seller pays it as part of a credit. Paying it yourself can sometimes lower the rate the lender offers.

Which one fits depends on how long you expect to keep the loan and how much cash you want to bring to closing. Ask for both versions if you want to compare.

What do the federal rules say?

• Pay can't be based on the loan's terms, such as the interest rate, so steering you to a costlier loan doesn't pay more.
• If you pay the broker directly, the broker can't also be paid by the lender on that loan.
• Federal rules also set out a safe way for a broker to show it isn't steering you: present loan options that include the lowest rate and the lowest total points and fees available for the type of loan you want.

Where do I see what the broker is paid?

If you pay the broker, the fee appears under Origination Charges on your Loan Estimate and Closing Disclosure. If the lender pays the broker, the Closing Disclosure shows it in the Paid by Others column. See how to read a Loan Estimate.

What does "mortgage broker only" mean?

It means the company arranges loans with outside lenders rather than lending its own money. Elite Mortgage Group, LLC is a mortgage broker only, not a mortgage lender or mortgage correspondent lender. The lender you choose approves and funds your loan. See mortgage broker vs. bank.

What should I ask?

Ask any broker or lender how they're paid on your loan, by whom, and what it costs you. Then compare Loan Estimates side by side. You can also check any loan officer's license on NMLS Consumer Access; Tom MacDonald is NMLS #2748687 with Elite Mortgage Group NMLS #2502308MBR.