| How Much Do Mortgage Agents Make Per Loan? |
|
How much a Loan Officer makes per loan depends on several factors:
Loan Amount: Fees typically reflect a percentage of the loan amount, the larger the loan the more commission a loan officer will make.
Creditworthiness - If you are an A borrower you will typically pay less in fees than a borrower who has little money to put down and has poor credit. However, just because your credit is not great, don't think you don't have options. Brokers all use the same banks, so if a loan officer charges you 3 points up front and tells you it’s because they are the only ones that can do the loan, and they are just mitigating their risk, so shop around.
Negotiating Skill – Yup, Donald Trump will probably pay fewer origination points than say Britney Spears. If you act desperate, expect the loan officer to take advantage of you.
Property Type - Loan Officers will typically charge more for a difficult-to-finance property than an easy one. A standard single family residence will usually take less effort on the part of the loan officer than a Condotel.
The Loan Officer's Ethics - The loan business has plenty of very ethical people that take great joy in getting people into their first home and treating them fairly in the process. However, like any sales related business, it is also chalk full of snakes that are happy to bilk customers, not care about repeat business, and move onto their next hustle. The best way to avoid this is to go with a seasoned veteran.
Many people assume that a loan officer's commission is basically made up of just up front charge, i.e. origination points, broker fees, etc. However, a commonly overlooked portion of what a loan officer makes is made up of back-end points. Referred to in the industry as the “Yield Spread Premium” or its lesser know cousin “Service Release Premium”, these fees don't always appear on your closing documents. Often times you can have a loan with little to no closing costs, Ditech for example, but your loan officer can still be making as many as 5 points on the back of your loan.
The average commission is around 2% of the loan amount - how much the loan officer keeps depends on their agreement with the broker. If they found the client on their own, they can expect to make about 70% or more of that 2%. If they were provided with the lead, expect that they will make 50% or less of than that 2%. But again, every brokerage may be slightly different.
If you obtain a mortgage for $300K, you have A-credit and put more than 20% down, your Loan Officer will probably make around 1.5%, or $4500 – But again, their exact take is dependent on the factors listed above.
If you obtain a mortgage for $200K, you have C-credit and are only able to put down around 5%, the loan officer will probably make around 2.5%, or $5000.
|

