I have done several real estate deals now, all involving some type of mortgage or commercial loan. I have only worked a deal once (that I can remember) where I allowed the mortgage broker to charge an origination fee. Origination fees are absolutely garbage and are just additional money that the broker or agent gets to keep.

If you think this is where mortgage agents and brokers make their primary money, you are sore mistaken. They get a spread when they sell the loan to the larger institutions, usually get an application fee, and other minor fees for processing the loan. So if they are charging you an origination fee on top of all of that, get out of Dodge, it is not a company or broker that you want to be dealing with to obtain your mortgage.

The one advantage to some mortgage brokers that charge origination fees are that they should have some pretty good incentive to provide timely, precision service (the one case that I can remember working with one that charged the origination fee provided terrible service, and was the most despicable transaction I have ever been privy to). However, there are many mortgage agents out there that will provide good service without the origination fee. My banker will actually show up in person to a closing, which is unheard of in today’s market, and he didn’t charge an origination fee either. Do your due diligence, and you can find someone local that will provide you this level of service.


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