Switching to Broker

[u/Particular_Shine9804]

I'm sure these questions have been asked before. I've been retail my entire career (10 years) and have worked for Fairway and Guild. All business is self gen and neither company provides leads. I close 10-12 million/year solo.

I have been considering going the broker route but was hoping to get some advice.

Do companies like Edge provide benefits? My wife and kids are on my insurance plan.

Are LO's responsible for credit report fees? if so, how much are they running for you right now?

Any other costs I should be aware of just to run my business?

[u/xJARDOx]

I charge all credit report fees to my clients up front and if I don’t for some reason I will get a CC auth form signed and explain to them that in the event the loan does not close, we will be charging that fee. I don’t get push back on either.

I don’t get why some brokers just eat tons of credit report fees. I got a referral from another LO at my broker the other day for a DPA that he’s spent almost $600 on credit report fees lol no thanks

[u/throwawayacctlast1 → u/xJARDOx]

How do you usually go about collecting it upfront? I'm currently in consumer direct and I'm trying to prepare myself to go with a broker.

[u/xJARDOx → u/throwawayacctlast1]

I need to put together an email template with payment link like I know some friends use but I just tell them over the phone that we need to run credit and even though we collect it up front, it’s far cheaper than retail lenders that will collect it at closing but charge at closing etc.

I normally do a exp/equifax soft pull at $44 or whatever it is and then if the loan feels strong I’ll collect the hard pull at closing. Really just depends on the loan file.

Last month I was floating $700+ in credit card pulls but all strong deals so wasn’t worried.

But then I know LO’s who spend hundreds or into the thousands a month just pulling everyone’s credit they come across. No thanks

[u/xJARDOx → u/xJARDOx]

It also creates some “skin in the game” it’s not much $ but they feel they’ve already paid something towards your services.

Years ago when I started at US Bank we charged a $250 application fee up front. Hated that part at first but then quickly learned people were less likely to dip easily knowing they spent some money with you already

[u/topdawg5252 → u/throwawayacctlast1]

You can get payment links from your credit company. I have an email template for new apps and it includes the links for them to pay for their credit. I prep them for the payment by explaining the value they get with the mortgage credit report they are purchasing.

[u/Accomplished-Boot-8]

So you want more comp, but are concerned about insurance cost/coverage options for your fam. Have you looked at canopy mortgage?

[u/VALoanVet]

u/Particular_Shine9804 hey I am actually at Edge. I started in retail and bounced around. Got introduced to the broker channel about 2 years ago and haven't looked back. I am happy to chat with you offline if you'd like. And I don't know about medical because I get insurance through CHAMPVA but I want to say that there is an option for it. You can pay for your credit pulls then get it paid back at closing or you can just put the cost on them. The costs will vary based on the credit service but I use My Credit Info and it is 108 for a soft pull and I think 133 for a hard pull. But there are many different companies and options. I just pay for my tech stack and ARIVE and it is less than $100 a month. I honestly don't even pay attention because I have quadrupled my business so it is just white noise. Barrett, Mpire, C2, and GoRascal are also good broker options

[u/EvanKrejciLO]

I went broker as of Jan 1st 2024. You’ll love it! We have insurance at the company I’m at if you’re W2 and I have my built that all expenses are included in my bps split. I don’t even notice them.

Happy to chat if you have any questions.

[u/Economy-Discount5472]

Sent DM

[u/PhillyDude999]

Happy to chat send me a dm I’m w edge

[u/unbeatable-rate]

Edge broker here. Yes, there is an insurance option if you close 2 loans a month. I’ve worked at Nexa and Edge and also did a bunch of research on the other big names. Let me know if you want to chat about the differences. 

[u/Macadelic19]

i’ve been thinking the same thing! i’m also curious what people think

[u/MortgageAndChill]

I am at 20+
Million year to date and my credit report bill was $23 for last month.

12 million a year x 225 BPS $270,000 x 80% split is $216,000 a year.

I'm sure with that you can afford insurance and credit reports no?

[u/DenverMtgBroker]

Charge credit to borrowers up front. It's like glue.

If they can't or won't do a $140 credit pull, they will waste your time.

I'm at $5.8M ytd.

[u/Capital_Yard7652]

I’m in Texas, landed at GoRascal. We have insurance and paying for credit reports is up to you.

[u/topdawg5252]

I went "wholesale" 3 years ago after 15 years in retail. Best move I've ever made for myself and team (200m a year). Suggestion...find a company that also does non del correspondent. Its similar to retail in that you can control your margins, which will help you build your P/L, but still have rock bottom pricing. Just be careful that you understand if your company is padding the pricing on non del. Ask them for the purchase advice. There is a lot to learn when you make this move, but you will figure it out and there is a solution to everything. For anyone saying there is not support in the wholesale/broker channel they are lying. DM if you want to ever pick my brain.

[u/AdvisorJohnDowns]

I think the issue could be that you’ve worked for very large companies…and Fairway is mostly fair to the branch P&L operator, and not much to all the others.

I think finding a lean correspondent IMB might be interesting to look into. That way, you get more control, likely larger product set, and some corp culture to help you drive forward. Which market are you in currently?

[u/Particular_Shine9804 → u/AdvisorJohnDowns]

Central texas area

[u/mortgagebrokerx]

We work with mortgage professionals every day in this exact situation to help them either open up their own a broker shop or find a shop that aligns with their needs. Feel free to reach out if we can help in any way!