why does my mortgage broker charge a fee?

They will try to charge you anything they can get away with. Mine tried to charge me $179 up front fee. When I questioned it, he waived it for me. But he charged all kinds of junk fee thru processing and under writing fee of $1,000. Yes, this is in addtion to 1pt of loan among. All junk fees are negotiable. Check out this web site, really helpful for me

www.mtgprofessor.com

Also google your broker to see if you find anything fishy

Well, a mortgage broker doesnt necessarily make 1% of the mortgage. Usually if he is making 1% then he's probably really getting 2% because he does have to split with his company. It depends if he is a broker or works directly with the bank. You should ask what that upfront fee is for. Upfront fees arent uncommon. We charge the appraisal upfront but that is somthing you have to pay for anyway. It gets paid directly to the appraiser appraising the property. If the fee isnt collected and if for some reason the the borrower doesnt want to go through with it then it has to come out of the loan officer's pocket.

Mortgage broker will charge what he can.
You can negotiate whatever you can.

I recommend Carolyn Warren's book "Mortgage Ripoffs and Money Savers" -- I give it to all my buyer clients.

ali r.
{downtown broker}

shong - what kind of things would a mortgage broker do to justify the 1%.

Lupus1,
I am going to get flamed for this but IMO, mortgage brokers is underpaid compare to RE agents.
They find the lowest rate, file all the paper work, also make sure the RE brokers are on top of things and that mortgage fees are in line.

I dont know but Im sure they would say all kinds of things. I dont charge points at the bank so I dont know. They may charge and justify it if no other lender can close the deal. The only time points are charged at the bank is to discount the rate but that isnt going to the loan officer but rather to your interest rate. sunny_hong@countrywide.com

Never pay any fees -- they can all be waived and their real take is in a % of the loan (you will see this in your closing docs). There are a million guys doing this, and all are pretty desperate right now, so they should be more than willing to be very flexible. Like RE brokers, they make a nice chunk of dough, and it is always in their interest to get you the largest loan possible.

ba294 - I agree. When my closing took 3 months my mortgage broker was constatntly checking rates and getting me the lowest rate - the rate I eventually closed on was .5% lower than the orginal commitement rate I signed with 3 months earlier and with a different lender.

He is probably charging $700 upfront because he knows you are going to whore yourself around town to at least 4 or 5 other mortgage brokers try to beat people over the head for an 1/8% improvement on the rate.

$700 is a little too high. I dont charge people upfront fees, but I have been in this business longer and can get deals done much faster. Newbie brokers find it hard to compete.

My broker charged me $350 on the backend.

my broker is from "manhattan mortgage" -- is that a decent company i can trust?

mine's a funny situation. so we're thinking about putting money down on a 1BR for a condo conversion that won't be finished (and thus, won't close) for another 10 months. what that means is that when i first went to the mortgage broker, he had me fill out all this paperwork, but then i realized we wouldn't really be able to get a rate that would last long enough to be relevant for our close date, so then i just pulled away and decided to wait -- especially given the upfront fee of $700. now, i get it that $700 isn't a lot of money in the grand scheme of things, but dammit i just don't wanna get nickel and dimed all the way through the process! i'm obviously a first time buyer, so this is all new to me, but i swear, i think this entire purchasing thing is a racket for everyone. every Joe and his brother has got his hand in the cookie jar charging 1% here, 3% there; ridiculous.

In this market, I think its best to go directly to a bank. Brokers were great when the mortgage market was booming but they are just middlemen. I know bc I used to work for a brokerage. Today, you want to work with someone that has an in-house underwriter who will let you know if you will get a full commitment on the loan. A broker will shop your loan until someone says yes but of course you dont know that and times ticking away. Upfront fees are very common and its something you are paying for at closing anyway.

I've used manhattan mortgage for three RE transactions over the years and obviously I like and trust them. However, I don't remember ever paying an upfront fee ... unless you mean the fees like appraisal, application fee, etc. I am not sure how condo conversions work (I've only purchased co-ops) but it seems too early to talk mortgage if you are going to close in 10 months.