Mortgage loan professionals are paid to close — not to get you the best rate

In a typical homebuying process, you’ll work with a pleasant and helpful mortgage loan professional. But you should know they might not have any obligation to make sure you get the lowest rate or best loan you’re eligible for.

In fact, contrary to common perception, loan officers and brokers rarely have a legally-mandated fiduciary duty to act in your best interests. And their urgency to close can start to feel like yours, leading to expensive consequences.

Bankrate interviewed 15 loan officers and brokers about how their compensation can influence their work with borrowers. (Some were granted anonymity due to their ongoing employment in the industry.) Our interviews revealed that lenders often motivate them — with pay, promotions and other rewards — to close quickly, even if it means shuttling borrowers into a suboptimal loan program or a too-high interest rate. 

These glaring and seemingly avoidable miscues in mortgage lending stem from two fundamental problems: Lenders’ incentive structures force well-meaning salespeople to move too fast, and some less-scrupulous loan professionals willingly cut corners because their company culture (or industry partners) encourage it. Both problems persist in an environment where rewards are paid out for “deals” instead of doing the right thing.

“Loan officers will always struggle with [this a] little bit if they have morals and ethics,” says veteran loan originator Justine Fees. “Not every loan officer is made the same in that regard.”

While speed can be useful to you as a homebuyer (or mortgage refinancer) — a quick and smooth closing, for example — you must ask yourself: Would  you prioritize it over a lower mortgage rate that could add up to tens of thousands of dollars in interest charges over the life of the loan (or hundreds of dollars per month)?

How commissions can influence mortgage loan professionals

Your loan officer or mortgage broker isn’t helping you buy a property out of the goodness of their heart. They make money when you get a home loan.

Like salespeople in other industries, loan professionals’ compensation is directly tied to the number of loans they close. As one loan officer told us, “I generate revenue — and if I don’t generate revenue, I don’t get paid.”

One officer-turned-broker told Bankrate that 65 to 70% of his income as a senior banker at a national lender was from bonuses, mostly for moving loans to — but not necessarily through — processing. That structure incentivized him and his colleagues to “throw a dirty loan” they knew wouldn’t make it past underwriting, just “to get paid.” They might have known for example that their estimate of a borrower’s income or current debt was inaccurate or insufficiently documented. 

If this happened to your loan, you’d be notified that your loan application was progressing, only to have it kicked back after the underwriter’s review. In the best case, you’d have the headache of amending your mortgage application. Or, when time is of the essence, stalled financing could mean losing a home you have under contract. It could also mean losing a lower APR if rates rise after you’re forced back to the beginning — or being deemed ineligible for the loan altogether.

Along with dollars-and-cents commissions, loan officers’ job titles and the associated base-pay bumps typically result from “hitting your numbers.” At one lender, a source tells Bankrate, loan officers’ position and pay would depend on how many mortgages they closed per month — regardless of whether they were helping homebuyers get their lowest mortgage rates.

Related: 3 traps the mortgage industry doesn’t want you to know about — and how to avoid them

Fees, who has worked for six mortgage lenders within the last three and a half years, says one former employer sponsored weekly contests that inspired her coworkers to move homebuyers through even initial stages of the mortgage approval process, such as a credit check. Fees described an especially high-stakes promotion in one of her past roles.

“If you wrote the most loans in the month, you got tickets to Vegas and the UFC fight,” she said. “Which is crazy.”

One loan officer admits to Bankrate that he outperformed smarter and more experienced colleagues simply because he “could write every loan I talked to.” His “drive” to make deals meant he closed more loans, earned more money and reached “president’s club banker” status, one of the industry’s common titles for high-achieving loan officers. He’s among a handful of loan professionals who expressed the idea that, “as long as the client’s happy and they got their house,” extra financing costs they pay don’t matter.

The consequences are clear, home lending insiders tell us: When loan officers and brokers are motivated to move quickly, borrowers end up with higher interest rates and closing costs. This “happens all the time,” they say.

What happens when lender incentives are misaligned with yours

In rarer cases, more often at smaller banks, full-time-employed loan officers earn flat salaries at firms that don’t pay out commissions. But even they have a lesser-known enticement to finalize home loans for clients, and quickly: referrals. 

If they’re receiving leads (clients) from a real estate agent or company — 30% of home purchase transactions involve the latter, according to 2025 research cited by the Consumer Policy Center — they’re motivated to offer an especially fast closing.

And when a loan professional promptly finalizes a mortgage for a similarly commission-dependent agent, that agent is more likely to keep sending leads in the other direction — regardless of whether that loan professional is the right person to handle your situation or can get you the lowest possible rate.

While an on-time or ahead-of-schedule closing is a boon to you as homebuyer (or refinancing applicant), it can come at a hidden cost. Most notably, you might be quoted a higher mortgage rate, perhaps because your loan officer doesn’t encourage you to shop around or offer you the best rate it can. If you end up with a rate that’s 50 basis points higher than what you could get, for example, it could mean overpaying by almost $45,000 over a 30-year repayment term, assuming the average loan size ($373,000).

Your loan professional’s rush to close might also lead them to overlooking other savings opportunities, such as a first-time homebuyer support program.

“If you miss out on a down payment assistance option, that could cost you like $50,000 right there in year one alone,” says Sharon Cornelissen, the Consumer Federation of America’s housing director. “Not all lenders will tell you about that, right?”

As basic as it may seem, you can also end up with a home loan type that’s not your best option, whether it be conventional or government-backed, for example, simply because of the industry’s incentive structure that prioritizes volume. Federal law prohibits loan officers from getting paid more for putting you into specific loan programs — but there’s no clear-cut punishment for putting you into the wrong one.

Justin Nooner, an experienced loan originator, left a former employer, in part, because he was pressured to “care less” about clients “and pump out more” loans. He says “a lot of people get put into the wrong loan for a variety of reasons.”

“As a general rule,” adds Nooner, “I’m going to almost always put it on the MLO for not asking enough questions, more than I’m going to put anything on the client for not knowing enough because, frankly, it’s our job to know what program to put them in and why.”

Lenders aren’t fiduciaries — what can you do about it?

While loan professionals are licensed — you may see it as an NMLS number in their email signature or online profile — they typically don’t have that legally-mandated fiduciary duty that lawyers, trustees and some financial advisers carry. 

One loan officer-turned-broker with 12 years of experience in the industry told us he didn’t “know the laws well enough” to clearly understand whether he has a responsibility to put a homebuyer’s interests before his own. Another claimed a federally-mandated fiduciary duty that doesn’t, in fact, exist.

Imagine going to a broker and requesting an FHA loan because you’ve heard about the smaller down payment requirement. But perhaps you’re not aware of the obligation to pay for pricey mortgage insurance on FHA loans. If the broker’s partner lender pays a higher commission for that specific product, how motivated will they be to point you in a better direction?

While lenders incentivize loan officers (their employees), they can also exert pressure on brokers. For instance, a lawsuit filed in April 2024 alleged one of the nation’s largest mortgage lenders by volume restricted brokers’ access to certain competitors: If you were working with this lender, the suit alleged in part, you couldn’t also do business with its competitors.

This can cause serious harm at the individual homebuyer level if you hire a broker thinking they will truly shop around on your behalf.

“When in reality, they’re getting a broker that sells 90% of their loans to one lender and is not allowed to sell their loans to some of these other highly competitive lenders,” says National Consumer Law Center senior attorney Andrew Pizor. “And how’s a consumer supposed to know that?”

Here’s what you should know: If you’re considering working with a loan officer or broker, confirm their licensing by searching their name or number in the Nationwide Multistate Licensing System (NMLS) database, and check their online reviews. Then hold their feet to the fire. Ask how they’re compensated and how it affects your options. Also, question why you should go with them instead of a competitor. Skepticism can be a helpful state of mind.

“A lot of experienced loan officers are very savvy and a little crafty,” says Loretta Cetkovic, who has worked for a retail lender, a bank and a brokerage in her loan origination career. “Do some background work on who you’re talking to… and don’t easily get talked into anything. Let loan officers work hard for your business.”

And keep in mind that a nonprofit agency’s housing counselor is your best bet for a true fiduciary in homebuying — you can find one via the CFPB. Housing counselors are certified by the US Department of Housing and Urban Development to offer independent guidance. But even a housing counselor can’t make sure you get the best deal on your mortgage. That part is up to you.

Secure at least three loan estimates from different lenders, not three from the same broker, says the NCLC’s Pizor.

Take it a step further by negotiating with each, asking your preferred lender to beat the lowest rate you find. Just be sure you’re making apples-to-apples, ideally same-day comparisons among rates and lenders, accounting for discount points too.