If a mortgage broker is arranging your private mortgage for you, you can expect to pay a broker fee, since in this instance the lender does not compensate the mortgage broker for their work.
These fees are deducted from the mortgage money provided at the time of closing. You only pay these fees if you get your money. A responsible mortgage professional will advise you of all these costs upfront so that there are no surprises. This way, you can make your decision as to whether to proceed, with all the facts in front of you.
Typically, brokerage fees are 1-2%, depending on how complicated the financing is and the amount you borrow. The brokerage fees vary from broker to broker and from loan to loan.
Factors mortgage brokers consider are:
- The complexity and level of effort they anticipate are involved to fund your mortgage.
- The size of your mortgage. The smaller your mortgage, the larger the fee may seem like a percentage of the loan amount, and the larger the mortgage, potentially the smaller the fee may seem like a percentage of the loan amount.
In some instances, if the amount of borrowed money is small, a broker may charge you a minimum fee instead of the percentage.