# mortgage broker question



## faline (Feb 10, 2011)

How do mortgage brokers make commission? A mortgage broker I recently engaged is pushing a fixed year term. I'm wondering if he gets more commission that way. If he's working in his own best interest rather than mine, I'll look elsewhere.


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## Mortgage u/w (Feb 6, 2014)

Mortgage brokers get paid a commission directly from the lender.

A good broker will explain that to you - actually, they must.

Some mortgage terms will pay different commissions.....shorter terms pay less. Higher terms pay more. On average, 5 year terms fetch just over 1% of the loan amount.

A broker should not ‘push’ any terms or products. They should be explaining the different products out there and recommend you the best solution for your needs. If you’re not comfortable with one particular broker, seek another one. There are many experienced brokers out there who offer sound advice. Referrals are your best source.


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## AltaRed (Jun 8, 2009)

Mortgage u/w said:


> Mortgage brokers get paid a commission directly from the lender.
> 
> A good broker will explain that to you - actually, they must.
> 
> ...


+1 When spouse's son and DIL sought a mortgage in 2018, their mortgage broker explained everything with respect to the options, how she would be compensated, and the basis of her recommendations. I was quite impressed by her transparency and depth of knowledge.


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## Eclectic12 (Oct 20, 2010)

That is what happened both times I used a mortgage broker. 

IIRC, each presented the top five mortgages fit what I was looking for with no pressure for one over the other. There were other ones that the details were available for but as they didn't fit, it was a quick explanation of why it didn't fit and a lot more detail for the top five.


Cheers


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## jmbagsy (Mar 14, 2017)

Good day everyone! was about to start another thread about this but might as well post my queries here...

So what is your criteria of a good mortgage broker? And what queries do you NEED to ask the broker to bring out in him/her the qualities you are looking for a good mortgage broker?


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## Mortgage u/w (Feb 6, 2014)

jmbagsy said:


> Good day everyone! was about to start another thread about this but might as well post my queries here...
> 
> So what is your criteria of a good mortgage broker? And what queries do you NEED to ask the broker to bring out in him/her the qualities you are looking for a good mortgage broker?


The best source is a good referral. There are bad apples in every domaine. Years of experience or the volume they sell does not necessarily make them 'good'. 

Lack of a referral source, the questions I would ask:
- why should I choose you over any other mortgage broker?
- How long have you been in business and how do you stay up to date with current trends?
- How many lenders do you deal with and which are your top 3?
- Explain how you get remunerated?

Aside from questions, do some background work of your own. See which brokerage firm the broker works for. Google the firm and see what comes up in general. A broker is only as good as the organization they associate themselves with.


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## jmbagsy (Mar 14, 2017)

Mortgage u/w said:


> The best source is a good referral. There are bad apples in every domaine. Years of experience or the volume they sell does not necessarily make them 'good'.
> 
> Lack of a referral source, the questions I would ask:
> - why should I choose you over any other mortgage broker?
> ...


This is very handy my friend, exactly what I needed. Thank you very much.


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## Eclectic12 (Oct 20, 2010)

I'd also check if the mortgage broker firm is owned by a particular mortgage lender. If so, I'd add a question about restrictions on the range of mortgage vendors.

I'd also listen closely for any pressure to go with one mortgage over another instead of outlining the differences then having you choose.


Cheers


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## jmbagsy (Mar 14, 2017)

Eclectic12 said:


> I'd also check if the mortgage broker firm is owned by a particular mortgage lender. If so, I'd add a question about restrictions on the range of mortgage vendors.
> 
> I'd also listen closely for any pressure to go with one mortgage over another instead of outlining the differences then having you choose.
> 
> ...


What do you mean by restrictions on the range of mortgage vendors?


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## SPQR1927 (Jun 7, 2019)

faline said:


> How do mortgage brokers make commission? A mortgage broker I recently engaged is pushing a fixed year term. I'm wondering if he gets more commission that way. If he's working in his own best interest rather than mine, I'll look elsewhere.


I used to be a broker. Commission compensation change all the time. If hes a broker (as in able to use various lenders) then usually the higher the term, the higher the compensation. Also, its not about whether your rate is fixed or variable for your brokers compensation, but more as to how much of rate he gave you. Lets say the 5 year fixed rate the lender is offering 4.5% but if the broker gives you 4.3%, it eats into his commission.


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