How Much Does Your Home Loan Broker Mortgage Intelligence Earn Four Your Loan?

How Much Does Your Home Loan Broker Mortgage Intelligence Earn Four Your Loan?

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Many people may not realize it, but two things are important to understand about home loans (Intelligence Hypothcaire).
1) Mortgage brokers get their commission based on the size of the loan, not on the interest rate and
2) Brokers often channel all loans to one lending institution to get a volume benefit.

You may have questioned how your mortgage broker (Intelligence Hypothecaire) is remunerated, since you do not pay him. This is an important consideration, since you want to know what will motivate the broker to increase his income.

Of course, a broker must earn income for his efforts, just as your lawyer, accountant or other expert who performs services for you does. However, in the case of a mortgage consultant, his fees are paid by the lending institution (Intelligence Hypothecaire) he places the loan with. This commission is based on the size of the home loan, and so the mortgage consultant has no control over the size of his commission, in most cases. For instance, a $200,000 loan will earn a fee that is twice as much as a $100,000 loan

There are a few special situations where the fee can be increased. Certain factors can change the fee such as
1) the term of the home loan hypotheque
2) certain variable rate mortgage products
3) the length of time the mortgage is guaranteed for

Therefore, the interest rate is not a determining factor for the fees of the mortgage broker - courtier hypothecaire . This is different from some of the bonus plans that banks have for their employees. (See Will my bank offer a better rate than a broker? to understand this better).

Brokers can, however, improve their fees by working with one bank. Banks frequently offer bonus programs whereby a broker will earn additional commission based on the volume of home loans he brings to the bank. It is a significant amount, ranging from 20% to 25% over the original commission.

This kind of program will only appeal to smaller brokers, however. Large brokers meet the required volume readily with many lending institutions, and therefore don't have to give all of their loans to one bank. For example a broker such as Mortgage Intelligence, who booked $8.1 billion in mortgage loans in 2005 would not be looking for volume programs. Another example is Multi-Pret/Mortgage Alliance, with over $5 billion in loans in 2005.

Now you have two more pieces of information regarding home loans and mortgage consultants that will help you find the best mortgage for you:
-Brokers earn their fees by the size of the loan; interest rates do not affect the fee of a broker.
-Large brokers are free to examine the loan offerings of all lending institutions, since they are not concerned about volume commissions; this gives the borrower the best choice of lending institutions to choose from.


About the Author:
Gregory writes articles for http://www.infohypothecaire.com/ - Pret hypothecaire. To have more information about mortgages, please visit one of his websites:

http://www.infohypothecaire.com



Article Originally Published On: http://www.articlesnatch.com


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