What You Can Be Making As A Mortgage Broker

Brokers typically aren’t paid a salary, so if we know what they’re making per loan, we’ll have a decent idea as to what they might take home each year as well depending on annual volume.

But you have to consider their costs to operate as well, which will vary based on how large their shop is, if they employ loan officers, how much they spend on advertising (if any), and so on.

How Does a Mortgage Broker Get Paid?

  • Either by the lender or by the borrower
  • They can charge an origination fee directly
  • Or elect to get paid by the lender
  • Which will result in a slightly higher interest rate

How Mortgage Broker Compensation Works Today

  • Brokers can no longer get paid twice on a single loan
  • Instead they have to choose how they want to be compensated
  • They may have a different compensation package with each lender
  • So depending on where the loan is placed their commission may vary

Mortgage brokers can only get paid by the borrower OR the lender, not both.

That doesn’t mean they can’t still make a lot of money per loan, it just means the way they can get paid via the wholesale mortgage channel is limited.

Brokers either charge directly to close the loan or they get paid by the lender and borrowers pay for the commission indirectly (not out-of-pocket at closing) via a higher interest rate.

Okay Great, So What Do Brokers Make?

  • Most are paid 2.25 points per loan on average
  • On a $300,000 loan would be $6,750
  • While it sounds like a tidy sum, we have to consider their volume and operating costs as well

As mentioned, we have to subtract the costs of doing business, which are variable. From there, you’d have your profit per loan.

Not a bad take for helping people get mortgage financing! Depending on how many loans are closed each month and what expenses are involved.

As you can see, mortgage broker salary will definitely vary based on the size of the loans they typically close. In more expensive areas of town (or the country), brokers might make six-figures or much, much more.

While those in lower-priced metros could make significantly less if costs are still relatively similar.

Additionally, brokers who focus on refinances might have higher loan volume than those who help home buyers purchase real estate, as the latter can be harder to come by.

Of course, if they partner with a local real estate office or two, they have the ability to generate a ton of purchase loan business too, so it’s hard to say either specialty would be more successful universally.

Their average income will also depend on the financial institutions they choose to partner with, as compensation structures and points per loan will vary across different mortgage lenders.

One aspect of a mortgage broker’s job is linking up with lending partners that are good at quickly closing loans, while also offering competitive pricing. As such, these partners can greatly affect a mortgage broker salary.

Written By: Colin Robertson

Ryan O'Kane I Loan Officer
CA BRE Broker #01845041 NMLS #292685
24 January
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