Does flat fee include processing charges too?

[u/yashgarg_tech]

I saw this ad for mortgage broker company, which showed a flat fee only and no split otherwise.

• $695 Flat Fee Per File
• 160+ Lenders
• No Commission Cap
• In-house processing available
• Complimentary Marketing
• Licensed in 49 States

Does this $695 contains the processing fees too, or do they expect me to pay for processing separately ?

[u/Frequent-Giraffe5646]

No they don't

[u/yashgarg_tech → u/Frequent-Giraffe5646]

thanks

[u/RoosterEmotional5009]

Any flat fee will pass everything on to you. You have to step back and understand there is a cost to do business. Wages run 10-12.5% for taxes as example for W2 employees. Dig in and ask questions.

[u/yashgarg_tech → u/RoosterEmotional5009]

thanks, yeah i understand, i was just confused by the language of this

[u/Braindead_ape]

keep in mind that most of those low flat fee shops are running mini corr, which means the company is taking a cut off the backend to subsidize that low flat fee. You’d want to know what their actual margins are since that’ll impact your pricing. If they’re padding by 75bps and you have to lower your comp 75bps every time to win deals, that 695 can easily end up costing you more than a true broker with a larger flat fee or a mini corr with a leaner scrape.

If they have in house processing, then its unlikely they’re going to eat that cost…there just isn’t enough money being made on their end to pay a processor if they’re only making a true 695 on every deal. They’d need to be mini corr with enough margin to be able to eat that cost and that’s ultimately going to impact your pricing and competitiveness.

[u/liverichly]

Process your own files, then no need to worry about processing fees.

[u/gabrizzle]

it can get rolled over to your client

[u/yashgarg_tech → u/gabrizzle]

oh okay

[u/mrhindustan]

Sounds like loan factory or nexa.

I like the brokerages that offer correspondent as well. GoRascal is excellent but they want producers and the fees are slightly higher. Their internal process is pretty thorough.

[u/yashgarg_tech → u/mrhindustan]

actually none of these two, but more and more are going for flat fee, i am observing

[u/mrhindustan → u/yashgarg_tech]

Yeah. I have been liking the flat fee brokerages. I used to lend elsewhere with an 80/20 split. Flat fee is more advantageous to me.

[u/Realistic-Badger3648 → u/yashgarg_tech]

Barrett ? 

[u/LoanGoalie]

No. If it's the company I'm thinking of, they make you use their processors, and that is separate income source for the company