Here's how they work. At a customer's request, UMBs disclose their fees to customers in writing and in advance. Customers of UMBs pay the broker's fee plus wholesale loan prices. Lenders offer wholesale prices to brokers because brokers perform costly services that lenders would otherwise be forced to provide themselves. The most important is finding, counseling and qualifying b orrowers.
Points are an upfront credit charge expressed as a percent of the loan amount.
Their fee is the markup, plus any payments that they receive from lenders. Because of the way they price their services, the UMBs interests are fully aligned with those of customers. In contrast, MBs are often in a conflict situation with customers. Since the UMB's fee is stipulated in advance, customers are automatically credited with any rebates received from lenders that would increase the UMB's fee beyond what was agreed upon. MBs may or may not credit customers for such rebates.