Before approaching a mortgage broker, the first question that arises in any borrower is who will be responsible for paying their fees. A lot of people presume that it is the borrower who pays the commission.
The truth is that most of the time, the lender who has to pay these fees once the mortgage broker manages to get a borrower for the lender. It can be said that this commission is a sort of gratitude the lender offers the broker for the effort they put in getting loans for them.
Commission may be paid as gratitude
In some cases, some borrowers have their own exclusive agents looking for mortgage loans for themselves. These brokers bring the borrower these loans at wholesale price. In turn, they receive a commission for the loan granted to the borrower.
However there are some borrowers who pay the mortgage broker a commission. This is for the mortgage loan the brokers arrange for them. As a form of gratitude for the time and hassles the brokers had saved them from, the borrowers will then give them additional compensation in the form of a commission.
Then again, there are also some borrowers who get the best quote for a mortgage from the broker, and then challenge their own bank for a better offer. In such cases, the mortgage broker does not receive any commission from the lender and borrower.