What is a reasonable Broker Fee
I Finance Construction has a minimum fee of $2,000.00 per mortgage depending on the size of the loan and how much work is involved. Beyond that the fee is charged out by percentage point. Normally the fee is between 1-2% and I also charge more if there is a co-broker involved in the deal. These are important facts for you to keep in mind when paying a broker fee:
• If you’re borrowing from a bank they don’t usually allow broker fees to be charged. They pay the broker directly at no cost to you.
• If you’re being charged more than 10% for a broker fee then that is truly very expensive and you might want to shop around for another broker.
• In some cases the broker may have worked on your deal for months and that’s how they justify the high broker fee but in my opinion that means they don’t have the contacts to get the deal done. Again, shop around.
• If your waiting weeks or months to get a commitment, once again the broker probably doesn’t have the contacts to get your deal done.
In summary if you need a deal and you’re not getting a commitment then it’s usually for 2 reasons. You don’t qualify because you haven’t got enough equity for a lender or your broker doesn’t have enough experience and contacts to get your deal financed.