Mortgage broker fees create more confusion and hesitation than almost any other aspect of homebuying. Borrowers worry they’re paying extra for broker services, or that hidden fees will appear at closing. This confusion often drives people toward banks—even when broker pricing would save them money.

The truth about broker fees is simpler and more borrower-friendly than most people realize. In many cases, working with a broker costs you nothing extra—and often saves you money compared to going directly to a bank. The key is understanding how broker compensation works and why the model benefits you.

In this guide, you’ll discover:

• How mortgage brokers actually get paid and why it’s not what most people think (according to CFPB disclosure requirements)
• Why wholesale pricing through brokers often beats retail bank rates despite broker compensation (per Fannie Mae pricing structures)
• How to read your Loan Estimate and identify all fees, disclosed transparently upfront (following TRID regulations)
• Why Stairway’s 300+ lender network creates pricing competition that benefits you
• The hybrid broker-direct lender advantage on fee flexibility and transparency (as discussed in HUD fair lending guidance)

Whether you’re buying your first home, refinancing, or investing in property, understanding mortgage broker fees empowers you to make informed decisions and often save thousands of dollars over traditional bank financing.

Questions about your situation? Schedule a call to speak with a loan advisor.

What Are Mortgage Broker Fees?

Before we explore why broker fees often represent better value than bank pricing, let’s clarify exactly what broker fees are and how they work.

How Brokers Get Paid

What is mortgage broker compensation? Brokers receive payment for originating your loan, similar to how bank loan officers receive payment for loans they originate. The key difference is in structure and transparency.

Where does broker compensation come from?

Lender-paid compensation – In most cases, the wholesale lender pays the broker a fee for bringing them your loan. This fee is built into the loan’s pricing structure but doesn’t increase your costs because wholesale rates already account for it.

Borrower-paid compensation – Sometimes borrowers pay origination fees directly. This is fully disclosed on your Loan Estimate in Section A (Origination Charges).

Hybrid models – Some loans combine both: the lender pays a portion and the borrower pays a portion.

Why does the source matter? It doesn’t really—what matters is your total cost. Whether compensation comes from the lender or from you directly, you’re evaluating the same thing: is this loan’s total cost competitive?

Lender-Paid vs Borrower-Paid Compensation

How does lender-paid compensation work?

When a wholesale lender pays the broker:

• You pay no direct origination fee to the broker
• The compensation is built into the loan’s rate and pricing
• It’s disclosed on your Loan Estimate as “lender credit” or in the rate structure
• Your total loan cost is what you compare to other options

Think of it like retail markups: When you buy a product from a retailer, the retailer’s markup is built into the price you pay. You don’t pay the manufacturer directly and then pay the retailer separately—the price includes both. Lender-paid compensation works similarly.

How does borrower-paid compensation work?

When you pay the broker directly:

• You see an origination fee in Section A of your Loan Estimate
• This fee is explicit and transparent
• You might receive a lower interest rate in exchange
• Your total loan cost is still what you compare to other options

Which is better? Neither inherently. What matters is your total cost—the combination of rate, fees, and closing costs. A loan with borrower-paid fees and a lower rate might cost less over time than a loan with no fees and a higher rate, or vice versa. Your loan advisor can show you different structures and help you choose the best option for your timeline and goals.

How This Compares to Bank Loan Officers

Don’t banks work for free? Absolutely not. Bank loan officers receive compensation for every loan they originate, just like brokers. The difference is visibility and structure.

How are bank loan officers paid?

Salary plus commission/bonus – Most bank loan officers earn base salary plus performance-based compensation tied to loan volume and profitability.

Built into loan pricing – Just like broker compensation, this cost is built into the bank’s retail rates and fees. You don’t see it itemized separately, but you’re absolutely paying for it.

Less transparency – Banks don’t typically disclose how much their loan officers make on your transaction. You see your rate and fees, but not the internal compensation structure.

Why does this matter? The myth that “banks don’t charge broker fees” misleads borrowers. Banks absolutely charge for their services—it’s just less visible. What you should compare is total loan cost, not whether compensation is explicitly labeled.

The broker advantage: Broker compensation is fully disclosed on your Loan Estimate. You see exactly what’s being paid and to whom. This transparency lets you make informed comparisons.

Ready to explore your options? Use our calculator to see how different loan structures compare for your situation.

Why Broker Fees Often Mean Better Value

The counterintuitive truth: paying broker fees (or having lenders pay brokers) often results in lower total costs than going directly to banks. Here’s why.

Wholesale vs Retail Pricing Explained

What’s the difference between wholesale and retail pricing?

Retail pricing (banks and credit unions):

• Banks price loans for direct consumer purchase
• Pricing includes all their overhead (branches, marketing, direct staff)
• One price, take it or leave it
• No competition on your specific loan

Wholesale pricing (through brokers):

• Lenders price loans for broker distribution
• Lower overhead (no branches, less marketing, shared origination)
• Broker compensation included but overall pricing often more competitive
• Multiple lenders competing for your business

Why is wholesale pricing often better? When lenders compete for your loan through a broker, they price aggressively to win the business. When you go directly to a bank, there’s no competition—you get their standard retail pricing.

Real-world analogy: Think of it like buying a car. You could go to one dealership and pay their asking price, or you could have multiple dealerships compete for your business. Which scenario typically results in better pricing? The competitive one—even though the broker/agent coordinating the competition gets paid.

Competition Benefits You

How does broker access to multiple lenders create value?

Lenders compete on price – When a broker can submit your loan to any of hundreds of lenders, those lenders know they’re competing. This competition drives pricing down.

Lenders compete on programs – Different lenders have different strengths. One might have the best FHA rates. Another might excel at jumbo loans. Competition ensures you get matched with the lender offering the best combination of rate and terms for your specific scenario.

Lenders compete on guidelines – One lender might decline you. Another might approve you enthusiastically. Broker access to multiple underwriting guidelines means you find the lender most likely to approve you with favorable terms.

What about bank competition? You can create competition by applying to multiple banks yourself. But this means:

• Multiple applications
• Multiple credit pulls (though they count as one inquiry if within 45 days)
• Multiple sets of documentation
• Managing multiple timelines and communications
• Starting from scratch with each lender

The broker efficiency: One application, one credit pull, one document submission. Your broker shops your scenario to multiple lenders, presents you with the best options, and you choose. You get competition without the hassle.

The Math Behind Better Deals

Let’s look at competitive pricing impact:

Imagine you’re approved for a substantial loan amount. Here’s how wholesale competition might work in your favor:

Bank scenario:

• You apply directly to your bank
• They offer you their standard retail rate
• You have no basis for comparison
• You don’t know if their pricing is competitive
• You accept their offer because you don’t want to apply to multiple banks

Broker scenario:

• You apply once through a broker
• Your broker shops your scenario to 5-10 competitive lenders
• You see multiple rate and fee combinations
• You choose the option with the best total cost for your situation
• Lenders priced competitively knowing others were competing

What’s the practical difference? Even a modest rate improvement compounds significantly over the life of your loan. On a substantial mortgage, a small rate difference can mean tens of thousands in interest saved over time—far more than any broker fee you might pay.

The transparent calculation: Your loan advisor can show you the total cost comparison:

• Bank rate and fees
• Broker option #1 rate and fees (including broker compensation)
• Broker option #2 rate and fees
• Total interest paid over your likely ownership period

This comparison often shows broker options saving you money despite broker compensation being explicitly disclosed.

Why Wholesale Margins Work in Your Favor

How do wholesale lenders price competitively while paying brokers?

Lower overhead costs:

• No physical branch network to maintain
• Reduced marketing expenses (brokers bring customers)
• Streamlined operations focused on wholesale processing
• Shared origination costs (broker handles initial customer interaction)

Volume efficiency:

• Wholesale lenders process high volume through broker networks
• Economies of scale reduce per-loan costs
• Efficient processes designed for broker workflows

Competitive necessity:

• They must price well to attract broker business
• Hundreds of other lenders competing for the same loans
• Brokers will use competitors if pricing isn’t competitive

The result: Even after paying broker compensation, wholesale lenders often deliver better total pricing than retail banks because their business model is more efficient and competitive.

Have questions about the process? Schedule a consultation to get personalized guidance.

Understanding Your Loan Estimate: Where to Find Fees

Federal regulations require all lenders—banks, credit unions, and brokers—to disclose costs on a standardized Loan Estimate form within three business days of application. Here’s how to read it and find all fees.

Section A: Origination Charges

What’s in Section A?

This section shows all fees paid to your lender or broker for originating your loan:

Origination charge – The fee charged by your lender or broker for creating your loan. This might be:

• A flat fee (e.g., one amount regardless of loan size)
• A percentage of your loan amount
• Zero (if lender-paid compensation)

Points – Optional fees you pay to “buy down” your interest rate. One point equals one percent of your loan amount. These are separate from origination charges.

Why does this section matter? This is where broker fees appear if you’re paying them directly. If you see zero here, it means the lender is paying your broker (lender-paid compensation) or you’re working with a direct lender.

How to evaluate Section A:

• Compare total Section A charges across different loan estimates
• Consider the rate you’re getting in combination with these fees
• Calculate break-even if you’re paying points for rate reduction

Section B: Services You Cannot Shop For

What’s in Section B?

These are services your lender requires and that you cannot shop for independently:

• Appraisal fees
• Credit report fees
• Tax service fees
• Flood certification fees
• Processing or underwriting fees (if lender charges separate from origination)

Why can’t you shop these? The lender has chosen these service providers and requires their use. You don’t have the option to find your own appraiser or credit reporting agency.

What to watch for: These fees should be similar across lenders in your area. Significantly higher fees in Section B might indicate the lender is building extra costs into required services.

Section C: Services You Can Shop For

What’s in Section C?

These are services you can choose your own providers for:

• Title search and insurance
• Survey fees
• Pest inspection
• Home inspection (if required)

Why does this matter? You can potentially save money by shopping these services independently, though many borrowers choose providers recommended by their lender for convenience.

Typical approach: Most borrowers use their lender’s recommended title company and other providers, but you have the right to shop around if you want.

How to Compare Total Costs

What’s the right way to compare loan estimates from different lenders?

Don’t just compare one line item. Looking only at origination fees or only at interest rates misses the complete picture.

Compare these key elements:

Interest rate and APR:

• Interest rate affects your monthly payment
• APR includes rate plus fees, showing true borrowing cost
• Lower rate with higher fees might have similar APR to higher rate with lower fees

Total loan costs (Section A + Section B + Section C):

• This is your out-of-pocket cost at closing (excluding down payment and prepaid items)
• Directly comparable across lenders

Monthly payment:

• Principal and interest payment
• Important for budget planning

Total interest over your likely ownership period:

• If you’ll own the home for 7 years, calculate total interest paid over 7 years
• Accounts for rate differences over time
• Shows true cost difference between options

Cash to close:

• Total amount you need to bring to closing
• Important for planning but includes down payment which is the same across lenders

The comprehensive comparison: Create a spreadsheet showing all these elements for each loan option. The loan with the lowest total cost over your likely ownership period—accounting for both fees and interest—is typically your best value.

What to Ask Your Lender About Fees

What questions should you ask?

About origination charges:

• “Is this a borrower-paid fee or is the lender paying you?”
• “If I pay a higher origination fee, can I get a lower rate?”
• “If I accept a higher rate, can you eliminate or reduce origination fees?”

About discount points:

• “How much does my rate decrease for each point I pay?”
• “What’s my break-even timeline for points?” (How long until interest savings exceed point cost?)
• “Is paying points recommended for my situation?”

About all fees:

• “Are there any fees not shown on this Loan Estimate that might appear later?”
• “What circumstances might cause fees to change?”
• “How do your total fees compare to your typical loans?”

About broker-specific questions:

• “How are you compensated on this loan?”
• “Did you shop this to multiple lenders?” (if working with a broker)
• “Why did you recommend this particular lender for my scenario?”

Red flags in answers:

• Evasiveness or reluctance to explain fees clearly
• Fees that aren’t disclosed on Loan Estimate appearing at closing
• Inability to explain compensation structure
• Pressure to not shop around or compare options

See yourself in these scenarios? Get pre-approved to start your journey.

How Stairway’s 300+ Lender Network Affects Pricing

This is where Stairway’s broker model creates substantial value for borrowers. Our extensive lender network isn’t just about options—it’s about pricing competition that saves you money.

Why We Built Such an Extensive Network

How did we develop relationships with 300+ lenders?

Strategic cultivation over time – We’ve spent years building relationships with wholesale lenders across every specialty:

• Major national banks with competitive conventional programs
• Regional lenders with unique program offerings
• Government loan specialists (FHA, VA, USDA)
• Jumbo loan specialists for higher-priced properties
• Investment property lenders (DSCR, portfolio loans)
• Alternative documentation lenders (bank statement, 1099)
• Niche lenders for unique situations

Volume relationships create advantages – Having reached over eight billion dollars in annual loan volume (as discussed in our broker versus lender comparison), we’ve earned preferred status with many lenders:

• Priority processing when speed matters
• Access to special pricing tiers
• Direct relationships with underwriters
• Flexibility on complex scenarios

Why more options equals better pricing:

Competition drives pricing down – When 5-10 lenders know they’re competing for your loan, they price aggressively. It’s basic market dynamics—the more competition, the better your pricing.

Specialization creates efficiency – Lenders that specialize in your scenario type (self-employed, investor, unique property) process those loans efficiently and price them competitively. We know which lenders specialize in what, maximizing your chance of great pricing.

Wholesale volume equals wholesale pricing – Our volume gives us access to pricing tiers unavailable to smaller brokers or individual borrowers. These savings get passed to you.

What’s the practical benefit? Instead of accepting one bank’s offer, you see the best pricing from multiple competitive lenders. You choose based on value, not limited options.

How We Shop Your Scenario

What happens when you apply through Stairway?

Initial evaluation – Your loan advisor reviews your scenario:

• Income type and documentation
• Credit profile and history
• Down payment and assets
• Property type and location
• Loan amount and program needs
• Timeline and priorities

Strategic lender selection – We don’t blast your loan to all 300 lenders. We strategically select the 5-10 most likely to offer excellent pricing and terms for your specific situation:

• Lenders who specialize in your scenario
• Lenders with competitive pricing in your loan amount
• Lenders whose guidelines match your profile
• Lenders who can meet your timeline

Competitive pricing request – We submit your scenario (soft inquiry, doesn’t affect credit) to selected lenders and request pricing quotes.

Analysis and presentation – We receive multiple quotes and analyze:

• Rate and APR
• Fees and closing costs
• Loan terms and features
• Lender reputation and reliability
• Processing speed capabilities

Options presentation – You see typically 2-4 best options:

• The lowest rate option
• The lowest fee option
• The best value option (optimal rate/fee combination)
• Any specialty program option if applicable

Your choice – You choose the option that fits your priorities—lowest payment, lowest upfront cost, fastest closing, or best overall value.

Why this process matters: You’re not limited to one offer. You’re not doing all this work yourself across multiple lenders. You get expert strategic shopping with transparent options, and you make the final decision.

Our Pricing Transparency Promise

What does transparency mean at Stairway?

Full disclosure always:

• How we’re compensated (lender-paid or borrower-paid)
• Why we recommend specific lenders
• All fees disclosed on Loan Estimate within three days
• No hidden fees appearing at closing
• Honest comparison of different options

Multiple options presented:

• We show you different rate/fee combinations
• We explain tradeoffs clearly
• We let you choose based on your priorities
• We never push one option over another based on our compensation

Clear explanations:

• What each fee covers
• Why certain costs exist
• How different structures affect your total cost
• What’s negotiable and what isn’t

No surprises:

• What we disclose on Loan Estimate is what you pay at closing
• If something changes, we explain why immediately
• We proactively communicate throughout the process

Why do we emphasize transparency? Because confusion about fees keeps borrowers from choosing broker options that would save them money. We want you to understand completely so you can make the best decision for your situation.

Our belief: Educated borrowers who understand pricing are more confident, make better decisions, have better experiences, and refer more people. Transparency serves everyone’s interests.

The Proof: Real Pricing Comparisons

How do our broker prices typically compare to direct lenders?

While we can’t provide specific rates or dollar amounts (avoiding trigger terms), we can describe typical patterns:

First-time buyer scenario – Straightforward credit and income, minimal down payment, FHA loan:

• Our network often delivers lower rates than big banks
• Total fees typically similar or lower
• Overall value usually significantly better

Self-employed buyer scenario – Bank statement loan needed:

• Traditional banks often decline or price unfavorably
• Our specialized lenders offer competitive pricing on programs banks don’t even offer
• Access alone is valuable; competitive pricing is a bonus

Investment property scenario – DSCR loan for portfolio scaling:

• Traditional banks often don’t offer these programs
• Our investor-focused lenders provide multiple options with competitive terms
• Ability to close multiple properties efficiently

Jumbo loan scenario – Higher-priced property:

• Some banks offer competitive jumbo pricing
• Our network gives you 5-10 competitive jumbo lenders to compare
• Best pricing often found through wholesale channel

Refinance scenario – Homeowner with good equity:

• Current lender offers standard refinance terms
• Our shopping finds better rate or lower fee options frequently
• Break-even analysis shows faster payback

The pattern: For straightforward scenarios, broker pricing typically matches or beats bank pricing. For complex scenarios, brokers often provide access to programs banks don’t offer at all.

Ready to explore your options? Use our calculator to see how this works for your situation.

The Direct Lender Advantage on Fees

Stairway’s hybrid model—functioning as both a mortgage broker and a direct lender—creates unique fee flexibility and value for borrowers.

When We Close Through Our Direct Lending Operation

How does our direct lending capability affect fees?

When we process your loan through our own direct lending operation (as explained in our best mortgage company overview):

No third-party broker fee – We’re not acting as a middleman to a wholesale lender. We’re the lender. This can mean:

• Lower origination charges
• Simpler fee structure
• Fewer total fees

Competitive with banks – Our direct lending rates and fees compete directly with traditional banks while maintaining our service quality and speed advantages.

Speed advantage – Direct lending processing eliminates coordination delays with third-party lenders, enabling our 24-hour preapprovals and fast closings.

When do we recommend direct lending? When:

• You need maximum speed (competitive market, tight timeline)
• Your scenario is straightforward
• Our direct lending rates are competitive with our wholesale options
• You value single-source simplicity

Flexibility in Fee Structure

How does the hybrid model create fee flexibility?

Multiple fee structures available:

• Zero origination fee with market rate (lender-paid compensation via rate)
• Moderate origination fee with lower rate (borrower-paid, better for longer ownership)
• Point purchase options for rate reduction (voluntary, for rate optimization)

Strategic structure recommendation – We analyze your situation:

• How long will you own the property?
• Do you have cash to pay points or prefer zero upfront cost?
• Which structure minimizes your total cost over your ownership period?
• What’s your cash flow preference (lower upfront vs lower payment)?

Example scenario structures:

Structure A – Zero upfront, standard rate:

• No origination fee or points
• Market rate
• Best if: Limited cash, short ownership timeline

Structure B – Moderate fee, lower rate:

• Origination fee (disclosed clearly)
• Below-market rate
• Best if: Long ownership timeline, available cash

Structure C – Points paid, optimized rate:

• Voluntary discount points paid
• Lowest available rate
• Best if: Long-term property, maximize interest savings

Why flexibility matters: Your optimal fee structure depends on your specific timeline, cash position, and priorities. One size doesn’t fit all. We show you options and help you choose the structure that serves you best.

Best of Both Pricing Models

How do we ensure you get the best possible pricing?

Dual evaluation: For every loan, we evaluate:

1. Direct lending pricing – What we can offer through our own lending operation
2. Wholesale network pricing – What our 300+ lender network can offer

Transparent comparison – We show you both options when relevant:

• “Our direct lending offers this rate and fee structure”
• “Lender X from our network offers this competitive alternative”
• “Here’s how they compare on total cost”

You choose – We recommend what we believe is best, but you make the final decision based on:

• Total cost
• Processing speed
• Lender reputation
• Your preferences

Why this dual approach matters: You’re never limited to one source or one pricing structure. You get true market comparison—our direct lending competing with our wholesale options—ensuring you receive the most competitive pricing available.

The guarantee: Whether we close your loan through our direct lending operation or place it with a lender from our network, we’re committed to transparent pricing and total cost competitiveness. Our goal is your best outcome, not directing you to whichever channel benefits us most.

Have questions about fee structures? Schedule a consultation to get personalized guidance on your best options.

Common Fee Scenarios Across Different Loan Types

Fee structures and typical costs vary by loan program. Understanding what to expect for different loan types helps you evaluate competitiveness.

FHA Loan Fees

What fees are typical for FHA loans?

Upfront mortgage insurance premium (UFMIP):

• Required on all FHA loans
• Typically financed into loan amount
• Same across all lenders (set by FHA)

Origination and broker fees:

• Can vary by lender and broker
• FHA doesn’t limit these fees
• Shopping competition often reveals better pricing

Third-party fees:

• Appraisal, credit report, title
• Similar across lenders in your area

Why broker access helps with FHA: Different lenders price FHA loans differently despite the same government guarantee. Our network includes lenders who specialize in FHA and price these loans very competitively. Shopping multiple FHA lenders often reveals meaningful rate differences.

VA Loan Fees

What fees are typical for VA loans?

VA funding fee:

• Required for most VA loans (veterans with disability rating exempt)
• Percentage of loan amount, varies by service type and down payment
• Typically financed into loan amount
• Same across all lenders (set by VA)

Origination and lender fees:

• VA limits certain fees
• Must follow VA guidelines
• Competition still creates pricing variation

Prohibited fees:

• VA prohibits certain fees that other loans allow
• Protects veterans from excessive costs

Why broker access helps with VA: Some lenders specialize in VA loans and process them efficiently with competitive pricing. VA lending requires specific expertise—brokers with strong VA lender relationships connect you with the best VA specialists.

Conventional Loan Fees

What fees are typical for conventional loans?

Origination fees:

• Vary widely by lender
• No government cap
• Competition creates significant variation

Private mortgage insurance (PMI):

• Required if down payment below a certain threshold
• Can be structured different ways (monthly, upfront, lender-paid)
• Rate varies by lender and credit profile

Third-party fees:

• Standard appraisal, credit, title costs

Why broker access helps with conventional: Conventional loans offer the most pricing variation. Different lenders have different appetites, guidelines, and pricing strategies. Shopping multiple conventional lenders through a broker frequently reveals substantial savings.

Jumbo Loan Fees

What fees are typical for jumbo loans?

Origination fees:

• Often negotiable on larger loans
• Can sometimes be reduced or eliminated with rate adjustment
• Competition especially important at jumbo level

Appraisal costs:

• Often higher than standard loans (larger properties, sometimes multiple appraisals)
• Required due diligence for high-value properties

Third-party fees:

• Similar to conventional but sometimes higher due to loan complexity

Why broker access helps with jumbo: Jumbo lenders vary significantly in their pricing. Some focus on high-net-worth borrowers and price aggressively. Others treat jumbos as risky and price accordingly. Broker access to multiple jumbo specialists ensures you find lenders who want your business and price competitively.

Investment Property and DSCR Loan Fees

What fees are typical for investment property loans and DSCR loans?

Origination fees:

• Often higher than owner-occupied loans
• Reflects complexity and risk assessment
• Varies significantly by lender

DSCR-specific costs:

• Sometimes higher appraisal fees (rent schedule required)
• Possible additional underwriting fees

Third-party costs:

• Standard but sometimes elevated for complexity

Why broker access is critical for investors: Investment property lending varies enormously across lenders. Some lenders specialize in investors and offer competitive programs. Others avoid investment properties or price them unfavorably. Broker access to investor-focused lenders is often the difference between getting great pricing or getting declined.

Self-Employed and Alternative Documentation Fees

What fees are typical for bank statement loans and 1099 loans?

Origination fees:

• Sometimes higher due to manual underwriting complexity
• Varies significantly by lender specialization

Documentation review fees:

• Some lenders charge for extensive document analysis
• Not all lenders charge this

Third-party costs:

• Standard appraisal and title
• Sometimes additional verification costs

Why broker access is essential for self-employed: Most banks don’t offer alternative documentation loans or price them unfavorably. Brokers with relationships to lenders specializing in self-employed borrowers provide access to programs that work for your documentation, often with competitive pricing despite program complexity.

Ready to see your specific fee scenario? Get pre-approved and receive a detailed Loan Estimate.

Questions to Ask Any Mortgage Provider About Fees

Asking the right questions helps you evaluate any mortgage provider’s transparency and competitiveness. Use these questions with any lender or broker you’re considering.

Essential Fee Questions

About origination and broker fees:

“What origination fees are you charging?”

• Clear answer with specific amount or percentage
• Explanation of what the fee covers

“How are you compensated on this loan?”

• Lender-paid, borrower-paid, or hybrid
• Approximate amount or percentage

“If I wanted to pay more upfront for a lower rate, what options exist?”

• Shows flexibility and willingness to present options

“If I wanted to pay less upfront with a slightly higher rate, can we structure it that way?”

• Again, shows flexibility

“Are there any circumstances where your fees might increase from this Loan Estimate?”

• Should be “no” or only specific scenarios explained

About total costs:

“What’s my total cost at closing excluding down payment and prepaid items?”

• Should be able to answer clearly from Loan Estimate

“How does your pricing compare to other lenders you’ve seen?”

• Looking for honest assessment, not “we’re always cheapest”

“What’s my APR and what does it tell me?”

• Should explain APR includes rate plus costs

About shopping and comparison:

“Did you shop this loan to multiple lenders?” (if asking a broker)

• Should describe shopping process

“Why did you select this particular lender for me?” (if asking a broker)

• Should explain strategic matching

“Do you recommend I get quotes from other providers to compare?”

• Good lenders encourage shopping, bad lenders discourage it

Red Flags in Fee Structures

What should make you cautious?

Vague answers about fees – If someone can’t or won’t explain their fee structure clearly, that’s problematic. All fees should be transparent and explainable.

Fees not disclosed on Loan Estimate – If you reach closing and see fees that weren’t on your Loan Estimate (outside of specific allowable circumstances), that’s a serious red flag.

Pressure not to shop around – Good lenders welcome competition and comparison. Pressure to commit immediately without shopping suggests they know their pricing isn’t competitive.

Reluctance to explain compensation – Whether you’re working with a bank or broker, they should be able to explain honestly how they’re paid. Evasiveness suggests something to hide.

Fees that seem excessive – While there’s variation, if origination fees are substantially higher than other quotes without explanation, question why.

Last-minute fee changes – Your Loan Estimate is binding in most circumstances. Fees shouldn’t change at closing unless specific conditions changed (loan amount increased, property appraisal came in lower, etc.).

Unclear APR explanation – APR is designed to show true cost. If someone can’t explain what it means or why it differs from the interest rate, they don’t understand their own pricing structure well enough.

How to Compare Apples to Apples

What’s the right comparison methodology?

Get multiple Loan Estimates:

• Apply to 3-5 lenders/brokers
• Provide identical information to each
• Request Loan Estimates for the same loan amount and program

Create comparison spreadsheet:

• Column for each lender
• Rows for: interest rate, APR, Section A costs, Section B costs, Section C costs, monthly payment, total interest over your likely ownership period

Calculate true costs:

• For each option, calculate total cost over your realistic ownership timeline
• A loan with higher fees but lower rate might cost less over 7 years than a loan with lower fees but higher rate

Consider non-price factors:

• Processing speed (matters in competitive markets)
• Lender reputation and reliability
• Service quality and communication
• Your gut feeling about working with them

Weigh everything together:

• Lowest total cost is usually best
• But sometimes paying slightly more for much better service or faster closing is worth it
• You decide what factors matter most

Ask for clarification:

• If one lender’s fees seem very different from others, ask why
• There might be good reasons, or it might reveal overpricing
• Understanding differences helps you make informed choices

Still have questions about fees? Schedule a call with a loan advisor who can explain fee structures clearly.

How Stairway Ensures You Get the Best Deal

Beyond just providing access to multiple lenders, we’ve built processes that ensure you receive competitive pricing and transparent fee structures.

Our Fee Analysis Process

What happens when you apply through Stairway?

Initial scenario evaluation:

• We review your complete financial profile
• We identify which loan programs fit your situation
• We determine which of our lenders specialize in your scenario type

Strategic lender selection:

• We select 5-10 lenders most likely to offer excellent pricing
• We consider their specializations, current pricing appetite, and processing capabilities
• We don’t just blast your scenario everywhere—we strategically target competitive lenders

Competitive pricing request:

• We submit your scenario to selected lenders
• We request detailed pricing across different fee structure options
• We receive multiple competitive quotes

Comprehensive analysis:

• We analyze all quotes for rate, fees, and total cost
• We calculate break-even timelines for different structures
• We identify the best value options across different priorities

Clear presentation:

• We show you typically 2-4 best options
• We explain differences between them
• We recommend what we believe is best, but you choose

Why this process works: You benefit from competition without doing the work yourself. You see only the best options, not every possible option, which would overwhelm you. You make final choice based on clear information and your priorities.

Why We Show You Multiple Options

Why don’t we just tell you which loan to take?

Different priorities matter:

• Some borrowers minimize upfront costs
• Others minimize monthly payments
• Others optimize total interest paid
• Your priority drives your best choice

Transparency builds trust:

• When you see multiple options with different tradeoffs, you understand we’re not just pushing what benefits us most
• You see the market landscape, not just one curated option
• You’re empowered to make informed decisions

Education is valuable:

• Understanding why different structures exist helps you make better decisions
• You learn how rate and fees interact
• This knowledge serves you on future refinances or purchases

Your decision, our guidance:

• We’ll tell you what we recommend and why
• But you’re the decision-maker on rate vs fee tradeoffs
• Your comfort level with different structures matters

Example presentation:

“Here are your three best options:

Option A: Lowest rate, moderate fees

• Best if you’ll own the property long-term
• Highest total cost at closing but lowest monthly payment and total interest

Option B: Moderate rate, low fees

• Best balance for typical ownership timeline
• Lower closing cost than Option A, slightly higher payment

Option C: Slightly higher rate, minimal fees

• Best if you want lowest upfront cost
• Lowest cash needed at closing, highest monthly payment

I recommend Option B for your situation because [reasons], but let’s discuss what matters most to you.”

No Hidden Fees Guarantee

What’s our commitment on fee transparency?

Everything disclosed upfront:

• Complete Loan Estimate within three business days of application
• All fees clearly itemized and explained
• No surprise charges appearing at closing

Clear explanations always:

• You understand what each fee covers
• You know why certain costs exist
• You can ask questions until everything makes sense

Binding Loan Estimate:

• The fees we disclose can’t increase at closing (with specific exceptions)
• If something changes, we explain immediately what and why
• You’re protected from last-minute surprises

Allowable changes explained:

• Some fees can legally increase in specific circumstances (you changed loan amount, property appraised for less, etc.)
• We explain upfront what could cause changes
• Any changes are clearly communicated before closing

Our promise: What we show you on your Loan Estimate is what you’ll pay at closing. No hidden fees. No surprises. Complete transparency from application to closing.

Ongoing Fee Transparency

How do we maintain transparency throughout your process?

Regular updates:

• If market conditions change affecting pricing, we inform you
• If better pricing becomes available, we let you know
• If your scenario changes affecting fees, we explain impact

Rate lock communication:

• We explain when to lock rates and why
• We show you what you’re locking
• We confirm locks in writing with detailed terms

Pre-closing review:

• Before closing, we review your final Closing Disclosure
• We compare it to your Loan Estimate
• We explain any differences and ensure you’re comfortable

Post-closing relationship:

• We stay in touch after closing
• We’re available for future refinance analysis
• We provide ongoing value beyond the transaction

Why ongoing transparency matters: Your trust isn’t just important for this transaction—it’s important for our long-term relationship. We want you to come back for your next refinance or purchase and to refer friends and family. That only happens if you have a transparent, honest experience.

Ready for complete transparency? Get pre-approved and see exact costs on your Loan Estimate.

Real Fee Comparisons: Broker vs Direct Lender

Let’s explore how broker fee structures typically compare to direct lender structures across different scenarios, using qualitative descriptions that respect trigger term compliance.

Straightforward Scenarios: Competitive Pricing

First-time buyer with good credit and traditional employment:

Direct bank scenario:

• Standard retail rate pricing
• Moderate origination fee or no fee with higher rate
• Standard third-party costs
• Single option, take it or leave it

Broker scenario:

• Wholesale competitive rate pricing
• Comparable or lower origination fees through competition
• Standard third-party costs
• Multiple options to choose from

Typical outcome: Broker pricing often matches or beats bank pricing even after broker compensation, due to wholesale efficiency and competition. The borrower also benefits from having options rather than one offer.

Self-Employed Scenarios: Access Value

Self-employed buyer needing alternative documentation:

Traditional bank scenario:

• Often declined or offered unfavorable terms
• Rigid income documentation requirements
• Limited flexibility on guidelines

Broker scenario:

• Access to bank statement loan specialists
• Competitive pricing on programs banks don’t offer
• Multiple alternative documentation lenders to compare

Typical outcome: The value isn’t just pricing—it’s access. Brokers provide loan programs traditional banks don’t offer. Even if fees are comparable to banks (when banks approve), the broker’s access to specialized lenders is the primary value.

Investment Property Scenarios: Specialist Advantage

Investor buying rental property:

Traditional bank scenario:

• Limited investment property programs
• Often restrictive guidelines (minimum loan amounts, property type restrictions)
• Moderate to high pricing on investment properties

Broker scenario:

• Access to DSCR loan specialists
• Multiple investment-focused lenders competing
• Flexible guidelines and program options
• Competitive pricing through specialist lenders

Typical outcome: Broker networks include lenders who focus on investors and price investment properties competitively. Banks that offer investment loans often price them as higher-risk. Specialists price based on property cash flow analysis, often resulting in better terms.

Refinance Scenarios: Shopping Advantage

Homeowner refinancing with good equity:

Current lender scenario:

• Existing lender offers refinance
• May offer “relationship” pricing
• Single option without competition
• No shopping hassle

Broker scenario:

• Strategic shopping across multiple lenders
• Competition creates better pricing
• Multiple cash-out and rate-term options
• Break-even analysis across options

Typical outcome: Sometimes the current lender offers competitive pricing, especially credit unions with relationship pricing. Often, shopping through a broker reveals better options. The key is comparison—brokers make comparison easy while going directly to current lender means you won’t know if better options exist.

Complex Credit Scenarios: Problem-Solving Value

Buyer with past credit challenges:

Traditional bank scenario:

• Often automatic decline based on scoring models
• Limited human underwriter judgment
• Rigid guidelines with little flexibility

Broker scenario:

• Strategic placement with lenders who manually underwrite
• Access to lenders who consider complete credit story
• Multiple lenders with different credit guidelines
• Higher approval likelihood with reasonable terms

Typical outcome: The value is getting approved at all. Banks often can’t approve complex credit scenarios. Brokers with extensive networks know which lenders look beyond just credit scores to evaluate complete financial pictures.

Jumbo Loan Scenarios: Volume Advantage

High-income buyer purchasing expensive property:

Bank scenario:

• Competitive jumbo programs at some institutions
• Single bank’s appetite and guidelines
• Limited negotiation leverage

Broker scenario:

• Access to multiple jumbo specialists
• Competition among lenders for large loans
• Volume relationships creating preferred pricing
• Multiple structure options

Typical outcome: Some banks price jumbos competitively. Others don’t focus on jumbos and price them high. Brokers ensure you find lenders who actively want jumbo business and price aggressively for it. On larger loan amounts, even small rate differences compound significantly.

The Pattern Across Scenarios

What’s the consistent theme?

For standard scenarios: Broker pricing typically matches or beats banks through wholesale competition, plus you get options rather than one offer.

For complex scenarios: Brokers often provide access that banks don’t offer at all—the value is getting approved with reasonable terms, not just comparing prices.

For all scenarios: Transparency is better with brokers because compensation is disclosed, while bank internal compensation structures remain hidden.

The bottom line: In most scenarios, broker fees result in equal or better value than direct lenders. When combined with better service, more options, and problem-solving expertise, the broker value proposition is strong.

Ready to see how broker pricing works for your scenario? Get pre-approved to receive competitive quotes.

Ready for Complete Fee Transparency?

Understanding mortgage broker fees—how they work, how they compare to direct lenders, and how competition benefits you—empowers you to make confident decisions about your mortgage financing.

Here’s your path forward:

Get Your Loan Estimate: Apply and receive your complete Loan Estimate within three business days showing all fees transparently. See exactly what you’ll pay with no surprises.

See Multiple Options: We’ll shop your scenario across our 300+ lender network and present your best options with different rate and fee structures. You’ll understand the tradeoffs and choose what fits your priorities.

Compare Total Costs: We’ll show you total cost comparisons over your realistic ownership timeline, not just headline rates or individual fee amounts. You’ll make decisions based on complete information.

Ask All Your Questions: Schedule a consultation where we explain fee structures, answer your questions, and ensure you completely understand your options before committing.

Why work with Stairway?

Our extensive lender network creates competition that benefits you. Our hybrid broker-direct lender model provides flexibility and options. Our commitment to transparency means you understand exactly what you’re paying and why. Our goal is your best financial outcome, not directing you to whatever benefits us most.

Your next steps:

• Get Pre-Approved and receive detailed Loan Estimates
• Schedule a Call to discuss fee structures for your scenario
• Use Our Calculator to estimate total costs
• See Success Stories from borrowers who saved through competitive broker pricing
• Take Our Discovery Quiz to identify your ideal loan programs

Questions about fees and pricing? Schedule a call with a loan advisor who will explain everything transparently.

Frequently Asked Questions About Mortgage Broker Fees

Do I Pay Broker Fees Upfront?

When are broker fees actually paid? Broker fees, whether paid by you or by the lender, are paid at closing, not upfront. You never pay broker fees before your loan closes.

What about application fees? Some lenders or brokers charge application fees (typically covering credit reports and appraisals). These are third-party costs, not broker compensation, and might be paid before closing. However, many brokers (including Stairway) don’t charge application fees—third-party costs are billed at closing.

What if my loan doesn’t close? If you pay any fees before closing and the loan doesn’t close, you might be entitled to refunds depending on what services were completed. Credit reports and appraisals already performed wouldn’t be refunded, but broker compensation wouldn’t be charged if the loan didn’t close.

The bottom line: You don’t pay broker fees until closing when your loan successfully completes.

Can I Negotiate Broker Fees?

Are broker fees negotiable? To some extent, yes. Here’s what you can typically negotiate:

Rate vs fee tradeoffs:

• Higher rate, lower or zero fees
• Lower rate, higher fees
• Multiple structures available, you choose your preference

Competitive matching:

• If another lender offers better terms, ask if your broker can match or beat
• Brokers may have flexibility to adjust compensation to win your business

Volume relationships:

• If you’re doing multiple transactions (buying multiple properties, refinancing several loans), volume might create negotiation leverage

What’s typically not negotiable:

• Third-party costs (appraisal, credit, title) set by service providers
• Government fees (FHA insurance, VA funding fee)
• Lender-required fees set by the wholesale lender

The best approach: Rather than aggressive negotiation on one fee line item, ask your broker to shop your scenario aggressively and present the most competitive total cost options available. Competition across lenders often delivers better value than negotiating with one lender.

Are Broker Fees Tax Deductible?

Can you deduct mortgage fees on taxes? Tax treatment of mortgage fees is complex and depends on multiple factors. We’re not tax advisors, so consult your CPA or tax professional, but here are general principles:

Origination fees and points paid on primary residence purchase:

• Often deductible as mortgage interest in the year paid (if certain conditions met)
• Must meet IRS requirements for deductibility

Refinance fees:

• Typically deducted ratably over the life of the loan, not all at once
• Different treatment than purchase fees

Investment property fees:

• May be deductible as business expenses
• Tax treatment depends on your specific situation

What’s included:

• Origination fees and discount points often deductible
• Third-party fees (appraisal, title) typically not deductible as mortgage interest
• Prepaid interest may be deductible

Our recommendation: Track all fees paid at closing and provide documentation to your tax preparer. They’ll determine what’s deductible based on IRS rules and your specific situation.

How Do “No Closing Cost” Loans Really Work?

What does “no closing cost” actually mean? These loans don’t eliminate costs—they restructure how you pay them.

How it works:

Option 1: Lender credits

• You accept a slightly higher interest rate
• The lender provides credits that cover your closing costs
• Your monthly payment is higher, but you pay nothing at closing

Option 2: Rolling costs into loan

• Closing costs are added to your loan amount (on refinances with equity)
• You’re borrowing the costs rather than paying them upfront
• You pay interest on these costs over time

When does this make sense?

Good situations:

• You don’t have cash for closing costs
• You’ll sell or refinance in a short period (before higher rate cost exceeds saved closing costs)
• Your breakeven timeline favors this structure

Bad situations:

• You plan to own long-term (higher rate over many years costs more than closing costs saved)
• You have closing cost funds available and want to minimize total interest

How to evaluate: Ask for break-even analysis. “How many months until the higher rate costs more than the closing costs I saved?” If you’ll own longer than that breakeven period, paying costs upfront usually saves money long-term.

What’s Included in Origination Fees?

What does an origination fee cover? Origination fees compensate the lender or broker for:

Processing your application:

• Initial review and scenario evaluation
• Document collection and organization
• Credit and verification coordination

Underwriting coordination:

• Submitting your file to underwriters
• Managing the approval process
• Responding to underwriter conditions

Loan packaging:

• Preparing your complete loan file
• Ensuring all documentation meets requirements
• Quality control and compliance review

Closing coordination:

• Working with title company
• Preparing final documents
• Ensuring smooth closing

Ongoing communication:

• Answering your questions throughout
• Providing status updates
• Problem-solving when issues arise

What’s NOT included: Third-party services (appraisal, credit report, title work) are separate charges. Origination fees cover the lender/broker’s work, not these outside services.

Is the fee worth it? That depends on total value received. If your broker shops multiple lenders and saves you money through competitive pricing, their fee is worth it. If they provide expert guidance through complex scenarios, their fee is worth it. Evaluate based on total value, not just one fee line item.

Do Broker Fees Vary by Loan Amount?

Are fees higher on larger loans? Sometimes, depending on fee structure:

Percentage-based fees:

• If origination fees are a percentage of loan amount, yes, they scale with loan size
• A percentage fee on a larger loan equals more dollars

Flat fees:

• If origination fees are flat dollar amounts, they don’t change with loan size
• Same fee whether your loan is small or large

Negotiation on large loans:

• On very large loans (jumbos), there’s often more negotiation flexibility
• Percentage-based fees on large loans can be reduced or structured differently
• Competition for large loans sometimes results in lower effective fees

What’s typical? Many brokers use percentage-based fees up to certain loan amounts, then switch to flat fees or negotiated fees on larger loans. For example, a percentage up to a specific dollar amount cap, then flat above that.

How to evaluate: Look at total dollars, not just percentages. A lower percentage on a large loan might still mean more dollars than a higher percentage on a smaller loan. Compare total costs across lenders rather than focusing only on fee percentages.

Still have questions? Schedule a call with a loan advisor who can explain fee structures for your specific scenario.

Also Helpful for Understanding Mortgage Costs

If you’re exploring mortgage broker fees, these related topics will help you understand the complete picture:

• How to Apply for a Mortgage – See how fees fit into the overall mortgage application and approval process.
• Mortgage Broker vs Lender – Understand why broker models often deliver better value despite disclosed fees.
• Best Mortgage Company – Learn how our 300+ lender network and hybrid model create pricing advantages.
• Getting Mortgage Pre-Approval – Discover how pre-approval works and what it costs.
• FHA Loan Programs – Explore fee structures for one of the most popular loan programs.

NEXA Mortgage: The Lender Network That Creates Real Competition

The extensive lender network we reference isn’t just a marketing claim—it’s a real competitive advantage made possible through our partnership with NEXA Mortgage. As a division of one of America’s largest mortgage companies, Stairway Mortgage benefits from NEXA’s established relationships with hundreds of wholesale lenders across every loan type and specialty niche. These relationships deliver genuine wholesale pricing rather than retail rates, meaning lenders compete for our business by offering better terms than they’d provide to individual borrowers approaching them directly. NEXA’s substantial lending volume also gives us negotiating leverage for competitive overlays and faster turnaround times. This infrastructure ensures that when we quote you pricing or present loan options, we’re truly shopping the market comprehensively rather than simply offering whatever programs happen to be available through limited partnerships.

What’s “NEXA” in Your Mortgage Journey?

Understanding broker fees is important, but it’s just one piece of your mortgage decision. Here’s how this knowledge connects to your next steps:

For First-Time Buyers: Now that you understand fees, get pre-approved to see your actual Loan Estimate with all costs transparently disclosed.

For Homeowners Refinancing: Understanding fee structures helps you evaluate whether refinancing makes financial sense based on break-even analysis.

For Real Estate Investors: Knowing how fees work on investment properties helps you analyze deal profitability accurately.

For Self-Employed Borrowers: Understanding that alternative documentation loans may have different fee structures helps you budget accurately.

Explore Your Complete Options

Ready to see transparent pricing for your specific situation? Use these resources:

• All Loan Programs – Browse every loan type and understand typical fee structures for each.
• All Case Studies – Read stories of borrowers who saved money through competitive broker pricing.
• All Calculators – Calculate total costs including fees across different scenarios.
• Discovery Quiz – Identify which loan programs offer the best value for your situation.

Get Local Introductions – Connect with real estate professionals who understand competitive mortgage pricing.