One of the core tenants of our business is that we’re honest about money. This means that we tell our customers how we much we are paid and what it means to them. We do so because transparency is the foundation of a trustworthy relationship. Other companies may claim to be transparent, but we haven’t found another company in the mortgage industry that tells consumers how much they are paid. Specifically, lenders (banks, credit unions and mortgage companies) do not disclose the commission they pay to brokers or how much they make when they close a loan. Likewise, lead generation sites, like LendingTree, do not disclose how much they get paid by the lenders that post rates on their sites. Withholding this information is a breach of trust because higher commissions and higher fees result in higher interest rates for consumers. At RateGravity, we believe that our customers have the right to know how we are paid and what our compensation is used for.
Therefore, as of January 1, 2019, our lenders will pay us .30% of the loan amount if a RateGravity customer closes with them. The minimum fee is $600 and the max fee is $3,000. We are increasing this fee from .25%. While our technology and lender network allows us to operate more efficiently than lenders and lead generation sites, we’ve realized that our customers benefit from our Home Advisors serving as their co-pilot from the start of the buyer journey until they close with their lender. In order to account for this personal service, we’re increasing the fee that we charge our lenders.
To be clear, homebuyers and homeowners that use our service don’t pay us anything. Although, any fee paid by a lender is ultimately reflected in the interest rates they offer. The fee we charge our lenders remains a fraction of the average commission that lenders pay to their own salespeople (most recently 1.15% according to the Mortgage Bankers Association) and the fee they pay to lead generation sites. This lower fee results in our customers saving tens of thousands of dollars when financing their home.
We are grateful to the thousands of people that have chosen to use RateGravity to get a mortgage. We exist to make sure all homebuyers get the best deal when securing home financing and we are committed to always doing so in an honest and transparent manner.