How do mortage brokers get paid/make money?

[boomhower]

This is purely just out of curiosity.  How do brokers get paid?  My understanding is that they don't actually lend money but find the  best loan for their client.  But how do they get paid?  Is it in higher rates or fees to the client?  Finders fees from the lenders?  If the client would have went to the lender that funds the loan directly would they have saved money? 

I'm not trying to insuate anything, I'm just curious how the broker relationship works.

[namvet]

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@boomhower wrote:

This is purely just out of curiosity.  How do brokers get paid?  My understanding is that they don't actually lend money but find the  best loan for their client.  But how do they get paid?  Is it in higher rates or fees to the client?  Finders fees from the lenders?  If the client would have went to the lender that funds the loan directly would they have saved money? 

I'm not trying to insuate anything, I'm just curious how the broker relationship works.

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The loan orgination fee which is usually 1% of the loan amount is paid to the broker.  Also in some cases a yield spread premium is paid by the lender to the broker.  This amount can vary depending on the interest rate the borrower paid.  All these fees are paid at or after funding of the mortgage.  The client usually will not  save money by going directly to the lender andin some cases may pay more than what the broker is charging.  Interest rates can change several times a day and a quote to the borrower and a lock in rate can result in more or less money to the broker.  Shop rates before commiting to a direct lender or mortgage broker and always get the GFE at application.