How am I paid?

This is a follow up to a question that I was asked the other day from a reader who asked:

"First of all, are you like a real estate broker, in addition to your specialist title?  Are you a consultant /broker or just an educational resource? What is your fee for consultation?"

I answered the first part to her question on an earlier post.   Leaving me the question of how I am paid.   

To begin with, I’m not paid hourly nor do I charge a fee for my consulting advice…some days I wish I were paid that way!   Mortgage Professionals/Loan Originators are paid when a transaction (purchase, refinance, second mortgage) closes and the loan funds.   So it’s very possible for a Mortgage Professional to spend hours, sometimes months, with a client advising them on their credit and/or creating a mortgage strategy and not get paid one penny!   I can accept not getting paid if a client is waiting to buy a home until the time is right for them…it does sting to have a client obtain financing elsewhere after investing a lot of time and effort into them.   This happens to the best of Mortgage Professionals.   I do my best to make sure that I’m working with clients who appreciate my time and advice and are as committed to me as I am to them. 

Back to the big question of my compensation.  Loan Originators are paid a couple different ways.   They may be paid by the consumer in the form of points, or by the lender as a rebate.   How the mortgage is priced, with points or without, will impact how the LO is paid.   It is the consumer’s choice on how they want their mortgage priced, with or without points.   A Loan Originator is going to be paid for their services either way.

I am paid a percentage of the loan amount.   Depending on the loan size and the difficulty or ease of the transaction, my income can range anywhere from a couple hundred dollars to around 1% of the loan amount divided by half and less the fees I pay towards our processing.   For example, if the loan amount is $200,000, the fee would be $2000 divide it in half (half to me and half to my employer, Mortgage Master), my portion would be less than $1000.  Again, each loan is unique and may be priced accordingly and each Loan Originator is extremely different with how they may price their mortgages…the sky just might be the limit for some.