Loan Officer Income
How much does the average loan officer make
off one loan?
The average loan officer usually makes a 40%-90% commission with no
salary or hourly rate. The difference in commissions is usually
based on experience and whether or not leads and/or advertising are
provided by the mortgage company.
The parts of the loan that are generally considered for the loan
officers commission split are:
-
Origination fee - This fee is usually between 0.5 and 2
percent of the total loan amount.
-
Discount fee/Points - This fee is rarely used in this
day and age, but was primarily charged if the consumer wanted to buy
their interest rate down, although surely some consumers have been
charged for no other reason then profit.
-
YSP
- Yield Spread Premium is the bread and butter of the industry.
This 3 letter abbreviation is responsible for more profit to
mortgage companies then the previous two combined.
Loan Officer makes: $2400-$5400
If your mortgage loan is $300,000 with a 1% origination fee and a
YSP of 1%,
your loan officer is more then likely making between $2400 and $5400
(40%-90% of origination and YSP) off your loan.
Loan Officer Makes: $12000-$27000
On a $1,000,000 loan with 0.5% origination and 2.5% YSP your looking
at the loan officer making between $12000 and $27000 (40%-90% of
origination and YSP) off your loan!
What is an estimate of closing cost?"
A good estimate of
closing
cost is 1% and 3% of the total loan amount. The secret to
keeping those fees as low as possible is to arm yourself with the
information needed to make confident and intelligent decisions and to
keep a close eye on your credit report.
You can ask all the right question about your mortgage loan, but if
you have no idea what the right answers should be, you're only going to
make it easy for dishonest loan officers to take advantage of you.