When obtaining a mortgage, it’s important to understand the fees involved in the process. Mortgage brokers serve as intermediaries between borrowers and lenders, taking on the responsibility of finding the most suitable mortgage options for their clients. While brokers provide valuable services, they do charge fees for their expertise and assistance. Let’s explore the fees that mortgage brokers can charge:
1. Brokerage fee
What fees can a mortgage broker charge? A mortgage broker may charge a brokerage fee, also known as an application or origination fee, which is typically a percentage of the total loan amount. This fee covers the broker’s time, effort, and expertise in finding and arranging the mortgage.
2. Commission
What fees can a mortgage broker charge? Brokers may also earn a commission from the lender when they successfully secure a mortgage for a borrower. This commission is usually a percentage of the loan amount and is paid by the lender, not the borrower.
3. Administrative fee
What fees can a mortgage broker charge? Some mortgage brokers may charge an administrative fee to cover the costs of handling paperwork, processing the application, and other administrative tasks. This fee is separate from the brokerage fee and is typically a flat rate.
4. Credit check fee
What fees can a mortgage broker charge? Mortgage brokers may charge a fee to cover the cost of obtaining and reviewing the borrower’s credit report. This fee is to ensure the borrower’s creditworthiness and is usually non-refundable.
5. Valuation fee
What fees can a mortgage broker charge? In some cases, brokers may charge a valuation fee to cover the cost of assessing the value of the property being purchased. This fee is paid to the lender or a third-party valuer.
6. Exit fee
What fees can a mortgage broker charge? An exit fee may be charged by the mortgage broker if the borrower decides to switch or refinance their mortgage before the agreed-upon term ends.
7. Document preparation fee
What fees can a mortgage broker charge? Mortgage brokers may charge a fee for preparing the necessary documents required for the mortgage application process.
8. Legal and settlement fee
What fees can a mortgage broker charge? Brokers may charge a fee to cover the legal and settlement costs associated with the mortgage transaction. This fee is typically paid to a solicitor or conveyancer.
9. Lender fee pass-through
What fees can a mortgage broker charge? Sometimes, mortgage brokers act as intermediaries for lenders and pass through certain lender fees to the borrower. These fees may include application fees, valuation fees, or other charges determined by the lender.
10. Ongoing service fee
What fees can a mortgage broker charge? Some mortgage brokers may charge an ongoing service fee if they provide ongoing support and advice to their clients throughout the life of the mortgage.
11. Additional fees
What fees can a mortgage broker charge? It’s essential to read the terms and conditions carefully, as some brokers may charge additional fees not mentioned above. To avoid surprises, borrowers should clarify the fees upfront.
12. How are mortgage broker fees paid?
Mortgage broker fees are typically paid at closing or added to the total mortgage loan amount. However, it’s crucial for borrowers to understand how the fees will be paid and factor them into their budget.