How do loan officers get paid? The Omega Lending team answered this and more during part 2 of the refinancing Q&A. Watch now!
Did you miss out on our refinancing Q&A last week? No worries, you have another chance to ask all of your pressing questions to these mortgage pros from Omega Lending Group. Don't miss out on this opportunity!
Posted by Inside Real Estate on Wednesday, August 19, 2020
“In the past loan officers would get paid for giving you a higher rate. Because they could make what’s called yield spread. So if like, let’s say the base rate was 3% and as a loan officer, I gave you three and a quarter, but that difference in rate paid us back, as a company, let’s say $3,000. Well in the past a loan officer could keep that money as what’s called premium. And they were incentivized, basically, to give higher rates. That changed- that changed back in 2009. Loan officers do not get paid more or less, If they give you a higher or lower rate. There is no incentive for a loan officer to charge you more. Now there are incentives or certain companies because they can make more money. So from a company to company standpoint, yes, there you will see some variations on what they decide what their margins are. But the reality is that the loan officer does not get to choose what they get paid on that deal whether they give you the lower rate or the higher rate, so they’re not incentivized to give you a higher rate. They want to get the deal period. So if you’re shopping for a mortgage, don’t think that the loan officer is in any way, shape or form incentivized to give you a higher rate. They don’t, it’s illegal to do that. Same with points. Points don’t go to the loan officer either. Points or what that rate costs to get for you. It doesn’t go to the loan officer.” – Omega Lending