Common Fees & Charges Associated With Using a Mortgage Broker
Finding a mortgage can be an extensive and time-consuming process. Utilizing a mortgage broker will simplify this process for you and help determine the loan that best meets your individual needs.
Before deciding whether or not you should work with a mortgage broker, it’s essential to be aware of the common fees & charges associated with using one. These may include origination fees, borrower fees, lender commissions and other costs.
Borrower Fees
Mortgage brokers usually charge a borrowers fee, which ranges from 1% to 2% of the total loan amount. This fee can be paid at closing or sometimes added onto the loan balance; it covers expenses related to preparing and processing your application, reviewing documents, making loan underwriting decisions and other services.
Lender Commissions
Brokers typically earn between 0.50% and 2.75% of the loan amount when they close your mortgage. They do this by connecting you with a lender who will then pay them their commission after closing.
Brokers may charge a commitment fee, which is typically collected upfront but refundable upon settlement. This fee ranges from $600 to $1000 (plus GST) depending on which broker you’re working with.
Cancellation Fees
Some mortgage brokers will charge a cancellation fee when you decide not to pursue your loan application. This is because the broker loses out on potential income if you opt out of taking out a mortgage.
If you’re uncertain whether a cancellation fee is worth it, talk with your mortgage broker. This is an effective way to assess whether they can assist in reaching your objectives.
Ask For a Testimonial
Before signing on with any mortgage broker, it’s wise to request testimonials from former customers. This provides insight into how they treat their clients, how effectively they communicate with them and if the mortgages they helped secure were worth it.
Furthermore, you can inquire if they offer any additional services that might help you get approved for a mortgage. For instance, ask them if they can assist with financing and if they’ll help connect you with an attorney to review closing documents.
It’s wise to read online reviews and see what other people have said about a mortgage broker you’re thinking of using. Organizations like Better Business Bureau, Google or Yelp can all serve as great starting points.
Finding the Ideal Mortgage Broker
If you’re not sure which broker is ideal for you, take time to meet with several and assess which will make the process easy and provide you with the most favorable outcomes. This way, you can determine which broker offers you the most advantageous deal.
Furthermore, a mortgage broker can save you time and money by finding the most suitable loan options for your specific situation. This is especially true if you have poor credit or limited income.
Do I Need a Mortgage Broker?
