How Lenders Earn Their Income
At JVM Lending, we earn income only when a buyer’s loan closes.
For loans with no discount points, our entire commission comes from selling the loan to an investor for a premium on the secondary market. This sale typically happens within one to three weeks after we fund the loan internally through our warehouse line of credit.
We generally quote rates with no points, meaning borrowers don’t pay us directly. Instead, our compensation is built into the investor’s premium when the loan is sold.
If a borrower chooses to pay discount points, our commission becomes a blend of those points and the secondary-market premium.
Why This Matters for Borrowers
Paying points to “buy down” an interest rate can sound appealing, but it rarely provides a strong return on investment. Typically, one discount point (1% of the loan amount) only reduces a rate by about 0.25%, depending on the market and loan type.
That’s why we usually advise against paying points — the savings often don’t justify the upfront cost.
Lastly, it’s worth noting a key difference in JVM’s structure. At most mortgage banks, the secondary-market premium is split between the loan officer and the branch.
Because JVM has no commissioned loan officers, we keep the full premium, which lowers our cost structure and allows us to offer more competitive rates to our clients.
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