How Much Can You Actually Make as a Mortgage Agent in Canada
How Much Can You Actually Make as a Mortgage Agent in Canada | Mortgage Agent Commissions Explained
Mortgage brokers can be very helpful during your home buying process, as they help you to get the financing that you need to purchase. Similar to real estate agents, as a buyer you will not directly pay a mortgage broker for their service. This is because their fee is incurred by the lender who is loaning you the money to purchase the home, as a finders fee.
Since the job is solely dependent on earning commissions through working with clients, a mortgage broker’s pay can be very volatile. For example, if a broker has many clients, they can earn large amounts of money through commissions. However, without a good reputation or if they are new to the industry, they may earn very little in commissions. With the average mortgage broker commission being between 0.5% and 1.2% of the mortgage amount, the average mortgage broker would bring in between $2500 and $6000 in revenue for brokering a $500,000 mortgage. If a mortgage broker is doing 25 mortgages a year with this average mortgage size, they will be earning between $62,500 and $150,000, before expenses. After expenses, which generally are ~20% of their commissions, a mortgage broker would likely earn between $50,000 and $120,000 per year.
Besides just earning up-front commissions from a client signing a mortgage, mortgage brokers may have other commission structures:
The first is through trailer fees, which is when the mortgage broker is paid for every year the mortgage holder has the mortgage, rather than with upfront commissions. This may cause a broker to recommend against switching mortgage lenders or not renewing your mortgage, as trailer fees are paid yearly.
Another way of payment is through renewals, where the original mortgage broker is paid when a mortgage holder renews their mortgage. Although your mortgage broker will be compensated if you renew your mortgage, this may not affect them considering that they will be compensated as well if they connect you to another lender instead.
For some private mortgage lenders who do not provide a commission to a mortgage broker for bringing in business, you may be required to pay your mortgage broker's fee. If this is the case, you and your mortgage broker will decide the fee before the transaction is finished, and could be around 1% of the mortgage amount.
As well, if you are to cancel your mortgage before you close the deal, you may be required to pay a cancellation fee of up to 1% of your mortgage amount, or it may be a flat fee. You may have this fee if you cancel the mortgage after receiving mortgage approval, as it would hurt the mortgage broker's efficiency rate.
Overall, with mortgage sizes becoming larger and larger as home prices in Canada rise, along with record sales numbers over the last year, the mortgage broker industry as a whole has done very well.
Links : https://wowa.ca/how-mortgage-brokers-...
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