Follow the money first
A mortgage pays for more than the money you borrow. It also pays for the people and systems that find customers, evaluate applications, arrange closing and service the loan. Some of that you pay directly; some is reflected in your pricing.1
Two things get confused constantly, and separating them is most of the work. The company’s revenue and your loan officer’s paycheck are different things. A large disclosed broker fee is not automatically the loan officer’s personal income, and an absent fee line does not mean a retail loan officer works for free.
Three ways the person is paid
Your loan officer is paid by the company they work for, out of the revenue your loan produces. That arrangement is agreed in advance, in writing, and it does not move with the terms you accept.1,2
A salaried loan officer is not a cheaper loan officer. Someone on salary at a depository is still selling that institution’s retail pricing. Someone on straight commission at a brokerage is still buying at wholesale.
How the person is paid tells you about their incentives. The channel and the company’s pricing tell you about your offer. Do not read one as evidence of the other — the salaried employee of a retail lender and the commissioned broker are not competing on their own compensation, they are competing on where their loans come from.
Who is actually handling your file
Ask how many people sit between you and a decision. An employee originator works from a set menu and hands the file to processing, underwriting and closing departments elsewhere in the company. An owner-operated branch that processes its own files carries less corporate overhead in its pricing and fewer handoffs in its workflow, and the person you are speaking with has authority over the work.
In our experience that structure often produces a better result on both price and execution, and it is why this branch is built the way it is. It is not a guarantee, and it is not a claim about any particular competitor. The written offers still decide.
Three questions worth asking early: Are you paid a salary, a commission or both? Does your pay change if I choose a different option? Who processes my file, and who do I call when something goes wrong?
Where the money actually comes from
The paycheck question sits inside a bigger one: which kind of company are you dealing with, and where does it get the money it lends you? A bank lends its deposits. A correspondent borrows on a warehouse line and sells the loan on. A broker does not fund the loan at all. Those structures price differently, and that difference reaches you. The next page takes each one apart.
Sources
These references support the factual explanations above. Where this page states a preference rather than a fact, it says so — those are our editorial judgement, not a claim that any one channel always costs less.
Next
Broker, bank, credit union or direct lender — what is the difference?Who funds your loan, where their revenue comes from, and what to weigh in each case.Start with a broker. Then vet the broker.The structural advantage is real. It is not automatic, and not every broker works it.The whole argument, in one place
Eighteen pages, including the printable checklist to take to every lender you talk to. Nothing to fill in, no email required.