Mortgage Brokers fees?

Question

What do mortgage brokers charge. We had a broker who wanted us to sign a contract for acommercial loan and his fee was 1% of the loan. ($4,600) This seems outrages to us.

John McCarthy · Answer

I started out with my bank that I have had my business with for over 20 years. They ended up being a pain in the ass. I went back to the mortgage broker and he had four banks to choose from. I just signed a commitment letter with one of the banks with very favorible terms.
The mortgage broker was worth the money.

Rodney Williams · Answer

One percent is not unusual and that is not all a broker will usually get. The underwriting agency(bank) will more than likely give him another point(one percent). I agree with Dion, this is less than I would charge especially for commercial. That is what I charged for residential,which is a lot less work.

Getting paid points on the loan is conditional to writing the loan.

Upfront charges are another thing and are usual in true commercial settings. They cover various aspects of due diligence on the property conditional to writing the loan. This is a protection to the lending agency and paid by the borrower.

So one point is a good deal.

Hope this helps.

Rodney

Joel Owens · Answer

John 1 point is CHEAP.......... very cheap for commercial.

Typical is 3 points but it depends on the size of the loan.If the loan is really large in the multi millions of dollars then 1 to 2 is typical.

Your loan sounds like a small loan for commercial based on 1 point your loan is around 460,000.That is very small for commercial and hard to fund.

Banks typically have loans that fit into a vanilla box.The loan broker has access to private money,equity funds,hedge funds,and a host of other sources to fund deals where a bank would say NO.

Don Konipol · Answer

If you don't like the 1point,  bring the deal to me. I charge 6!

Dion DePaoli · Answer

One caveat to the post.  He should be asking for that based on his success of getting you the loan.  I wouldn't ask for it up front.

Jesse Gonzalez · Answer

"I'm going to meet with a broker next week. Is it OK to ask what the points are up front?"

Yes, it's acceptable.

Pam Sky · Answer

I'm going to meet with a broker next week.  Is it OK to ask what the points are up front?

Bill Gulley · Answer

Geeez, I charged that 15 years ago! But it depend on the deal and how organized the applicant was too. If I had to strat from scratch and walk someone through pro forma statements and dig stuff out of their books, it was 2 points! Yes, I didn't miss too many meals....

A good broker will save you money too, so even if the points are there, check the deal and look at the big picture.

Glad you got a good one...

Rodney Williams · Answer

Not necessarily the broker will work harder for you. The banker has to meet certain goals, however he still gets a paycheck. The broker gets paid at the closing. When I was doing this I was a pit-bull with underwriters who would disqualify a loan because the colors were not right.

John McCarthy · Answer

His fee is based on getting the loan. If the property is bankable is a bank the better option.

Mortgage Brokers fees?

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