To real estate professionals and home buyers regarding broker fees, and what is a FAIR AMOUNT?

Question

I am a mortgage broker and have been since 2001. I have a masters degree in Finance and not only know how to do loans, but I truly believe in "customer service and fairness."
My question is this; is it fair for me as the mortgage broker to charge $995.00 on the front as my broker fee, $0.00 in YSP, and give the borrower the lowest possible rate? I have been doing this for several months now, but really wondered if people really do care about fees. Yes, I want to continue to make a living in this business, but the last two months I have closed 6 loans each month, but after my split with my company, I take home $1500 a month. I won't last long if I keep this up....any suggestions????

Answer 1

You are being TOO generous. The realtors make up to 6% on their transactions.. industry standard for financing cheaply is 1 to 1.5% total between origination and ysp..... Industry standard for financing fees that are moderate but still fair is 2 to 2.5% between origination and ysp... Anything after that is pretty much not being so fair.. Unless of course you have jumped through a thousand hoops trying to get their loan done. Like driving to the courthouse because they dont have their old bankruptcy papers because they have lost them.. Having to repair their credit etc etc. In this case it is fair.. YOU are your KNOWLEDGE is worth money too. Your time is worth money. Please don't sell yourself short! There is no way you should be only bringing home 1500 a month if you are closing 6 untils per month...

Answer 2

You and you alone can determine what your services and time is worth. Also what your clients are willing to pay for the services you offer.

What I would charge for services rendered a client you might not, because I certainly would charge more than $995.00 for a loan that closed and I was the consultant.

If a client is fee conscious, I can give him/her a no fee/no points loan and I tell them that this will increase the rate slightly. They are happy with that.

There are some that understand the income tax recourse about paying up front points and fees and take those type loans.

So when you come to an agreement with what your service, education, knowledge and time is worth you will have to continue doing what you are doing.

When you do figure those things out you will then not ask these questions.

I hope this is of some use to you, good luck.

"FIGHT ON"

Answer 3

If you are closing 6 deals a month and only taking 1500 home, maybe the split you are on is not fair? If you are trying to tell us you make $250 off each transaction, then you are getting screwed. Most loan officers I know make 2-3k off each transaction. If you are going to only make 1500/month, I would suggest you leave the business, its not worth it to get paid peanuts.

Answer 4

Do you mean charging loan applicants?
Any amount is "fair' as long as both parties agree. As for actual number, well, whatever "market can carry."
In some markets you can charge much more, in some markets you'll not have any business unless you offer no fee loans and make your living by getting paid by lenders only.

Answer 5

in case you prefer to grant a individual money for helping you in merchandising your place that's ok. you're actually not constrained as to how plenty you provide this individual as somebody has indicated. you may desire to verify how plenty it grow to be properly worth so which you will have the learning that this individual offered a shopper to you. There are million greenback deals made on a daily basis by people who have not got a license of any variety and those adult men get hundreds of thousands of greenbacks for merchandising training that reason a deal to be made and closed. The complicated area comes in case you prefer to deduct this as an cost of merchandising the domicile. you may might desire to ask your tax representative approximately this. they might have the means to look on the various IRS codes and inform you prefer you could deduct and what you could not deduct. in case you prefer to do this as a profession think approximately to look into getting a license or as between the human beings interior the communicate board stated, purchase the domicile with a perfect of task. you will might desire to get a e book on actual materials investment to understand a number of the words, so get to a e book keep and purchase numerous books on figuring out to purchase and merchandising actual materials for a liviing or making a residing or figuring out to purchase rehabbing and merchandising. i'm hoping this has been of a few use to you, solid success. "combat ON"