Mortgage brokers are most often paid by lenders, sometimes by borrowers, but never both.

The competitiveness — and home prices — in your local market will have a hand in dictating what brokers charge. “Under Dodd-Frank … brokers aren’t allowed to make more than 3% in points and fees,” says Rick Bettencourt, president of the National Association of Mortgage Brokers. That restriction was put into the financial regulation law as a result of the predatory lending that triggered the housing crash. It originally applied to mortgages of $100,000 or more, though that threshold has risen with inflation. Lender-paid compensation plans pay brokers from 0.50% to 2.75% of the loan amount, he says.You can also choose to pay the broker yourself. That’s called “borrower-paid compensation.”