Answers · Buying a home
What does a mortgage broker cost, and who pays?
In most cases the lender pays the broker, not you. The broker's compensation is built into the loan the lender offers, and it has to be disclosed to you in writing in your loan disclosures. There are structures where the borrower pays the broker directly instead. Either way, you see the number before you commit.
Written by Andrew Malm, Senior Loan Originator, NMLS# 2663426. Last reviewed .
A broker does not lend money. I work through Edge Home Finance, LLC, a mortgage broker: I shop your file across the lenders we work with, and whichever lender funds the loan pays us for bringing it a closed, complete file. That is why using a broker usually costs you nothing out of pocket beyond the normal costs of any mortgage.
The rules here are strict and they protect you. By rule, my compensation cannot be based on the terms of your loan, so I have no reason to steer you toward one option over another except that it fits. It also has to appear in your loan disclosures, so you are never guessing.
What you are actually paying for, in time and attention, is the shopping and the fight. One application, many lenders, and someone whose job is to get the file through underwriting.
I will always tell you how I am paid on your specific loan. If you ever work with a lender who will not, that is your answer about them.
What I'd do
- Ask any lender, broker or bank, to walk you through the loan estimate line by line.
- Compare total cost, not just the rate. Fees and credits matter.
- If the answer to "how are you paid" is vague, keep shopping.
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