Mortgage lenders can make money in a variety of ways, which includes origination fees, discount points, yield spread premiums, closing costs, loan servicing and mortgage-backed securities.
Yield spreads are the spreads which include the spread of the rate which any lender pays for money borrowed by them from larger banks and the rate which they charge from borrowers.
Closing costs are the fees which the lenders may take from th8e borrower include application, underwriting, processing, loan lock, and other fees.
Lenders always use their funds when they extend mortgages, they charge an origination fee of 0.5% to 1% of the loan value for extending this , which becomes due with mortgage payments.
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