Mortgage Fees

Mortgage brokers and agents in most cases do not charge fees to borrowers.  Lenders and financial institutions pay mortgage brokers and agents a finder’s fee, and in some cases additional volume bonuses. 

In some situations, mortgage brokers and agents charge additional fees, when they have to turn to private lenders for mortgages as a result of traditional institutions turning down borrowers.  Mortgage brokers and agents tend to charge fees on small mortgage deals because small mortgage transactions take up the same or longer amount of time as larger mortgage transactions.  Additonally, because finder’s fees are based on the size of the mortgage transaction, mortgage brokers and agents in some cases charge a small fee to structure the transaction.

Commercial mortgage lenders in many cases do not pay mortgage brokers and agents finder’s fees.   These types of commercial mortgage transactions are in most cases exceptionally difficult to package and structure, and can take a considerable amount of time.  In cases such as commercial mortgage transactions in Canada, mortgage brokers and agents typically charge a fee for the time spent to get a commercial mortgage completed and funded.

In many provinces, mortgage brokers and agents are prohibited from asking for any up front mortgage fee.  Additionally, in some cases and provinces, brokers and agents are prohibited from charging upfront fees on mortgages until a certain threshold dollar amount is reached. 

Borrowers should request itemized documentation in cases where upfront broker and agent fees are requested.  It should also be documented that in the event financing is not secured, the upfront broker or agent fees will be returned to the applicant.

Mortgage brokers and agents in Canada are in the majority of cases regulated, ensuring compliance with finance and banking laws in the provinces they are licensed in.  The amount of regulation depends on the jurisdiction they reside and conduct their business in. 

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