Yes, there is always a cost. But except in certain circumstances, the mortgage broker fee is already included in the pricing of the interest rate you’re being offered.

Mortgage brokers have compensation agreements in place with wholesale lenders, and they get paid an agreed upon percentage of each loan closed. This amount is disclosed on your Closing Disclosure in the “paid by others” column.

There are two important things you should know about mortgage brokers, and the regulation they abide by:

• A mortgage broker cannot be compensated based on the terms of the transaction, only based on the transaction amount.
• Compensation can come from the lender OR from the borrower, but never from both.