The wholesale mortgage pricing structure is a chain of three prices: the lender’s par rate sheet, the broker’s disclosed compensation, and the adjustments your specific file triggers. Duane Buziak (NMLS #1110647), an independent mortgage broker who has worked with wholesale lenders since 2014, walks through each link below, with a worked dollar example, so you can read a Loan Estimate and see where every dollar comes from.
The most common mistakes come from skipping a link. Borrowers assume the advertised rate applies to everyone, or that a broker fee is hidden somewhere, or that wholesale is automatically cheaper. None of those is reliably true, and the arithmetic shows why.
Where Wholesale Pricing Starts: The Lender Rate Sheet
Wholesale lenders such as UWM, PennyMac, and Newrez publish rate sheets to the brokers they have approved. Duane Buziak accesses these through independent wholesale broker relationships; he is not part of any of these lenders. The sheets are repriced as bond-market conditions change, because mortgage rates track the prices investors pay for mortgage-backed securities (MBS). When MBS prices fall, lenders reprice worse, and sometimes that happens more than once in a day.
Two terms matter most when reading a sheet.
- Price: a number expressed against 100. A price of 100.000 means the lender pays exactly the loan amount for that rate, with no credit and no charge.
- Par rate: the rate priced at, or closest to, 100.000. Rates lower than par cost extra; rates higher than par pay extra.
Every rate on the sheet carries its own price. A rate priced above 100 produces a lender credit (sometimes called a rebate), because the lender values that higher-rate loan at more than face value. A rate priced below 100 produces discount points, which are a cost to the borrower. Each full point equals 1% of the loan amount.
Rate sheets are lender-specific, they differ by loan program, and they change, so any price you see quoted is accurate only as of the time it was pulled. A sheet from one morning is not a forecast for the afternoon.
This is where the independent-broker model matters. A borrower who calls one lender directly sees one lender’s pricing. A broker can lay several lenders’ sheets side by side for the same scenario and see which one prices that particular file most favorably that day. That does not guarantee a lower cost on every loan, since the answer depends on the file, but it does widen what gets compared.
The Adjustments That Move Your Price: LLPAs and Risk-Based Pricing
The sheet’s base price assumes a baseline borrower. Your file then adds or subtracts price through loan-level price adjustments, or LLPAs. These are risk-based charges (and occasionally credits) tied to the characteristics of the loan, including:
- Credit score
- Loan-to-value ratio (LTV)
- Occupancy: primary residence, second home, or investment property
- Loan purpose, such as purchase, rate-and-term refinance, or cash-out
- Property type, such as a condo or multi-unit building
For conventional loans sold to the GSEs, the grid is published. Fannie Mae maintains a Loan-Level Price Adjustment Matrix that lenders apply, and the Federal Housing Finance Agency announces changes to GSE fee structures on its FHFA site. These matrices are revised from time to time, so check the current version rather than relying on a figure you saw last year. This article does not quote specific LLPA numbers for that reason.
Direction is more reliable than any single figure. A lower credit score, a higher LTV, an investment property, or a cash-out refinance generally pushes the price down, which means fewer credits or more points. Stack several of those traits and the effect compounds.
Non-agency programs use their own grids
Loans that are not sold to Fannie Mae or Freddie Mac do not use the GSE matrix. Non-QM lenders such as A&D Mortgage, Angel Oak Mortgage Solutions, and Arc Home build their own lender-specific adjustment grids around alternative-documentation programs, so pricing for bank-statement or investor-cash-flow scenarios must be read from that lender’s sheet, not inferred from the agency matrix.
The practical consequence is a misconception worth correcting: the advertised rate is not the rate your file receives. An advertised rate usually reflects a strong-credit, lower-LTV, primary-residence scenario with specific points. Your file’s adjustments determine the real number.
How Broker Compensation Fits In: Lender-Paid vs. Borrower-Paid
The second link in the chain is the broker’s pay, and it comes in two forms. In borrower-paid compensation, the borrower pays the broker directly, typically as a percentage of the loan amount shown as an origination charge. In lender-paid compensation, the lender pays the broker out of the price on the sheet, and the borrower sees that cost reflected in the rate instead of as a separate fee.
The two cannot be combined on one loan. Under the CFPB’s loan originator compensation rule in Regulation 1026.36 (part of Regulation Z), a broker generally may not receive compensation from both the borrower and the lender on the same transaction. The rule also bars compensation that varies based on the terms of the loan, other than the loan amount, so a broker cannot earn more by steering you into a higher rate. Read the rule’s current text for the precise limits.
Compensation is not hidden. It appears on your Loan Estimate and, at the end of the process, on your Closing Disclosure. The CFPB explains both documents in its Loan Estimate guide. Broker compensation is agreed in advance, in writing, before you lock.
Retail lenders earn money the same basic way, but it is bundled differently. A retail lender sets its own margin on top of its cost of funds, and loan officer pay comes out of that margin, so the borrower sees one all-in rate and fee package. That model is neither better nor worse in principle. Wholesale is not guaranteed to be cheaper on every file, and the honest test is to compare Loan Estimates for the same scenario, same lock period, and same points.
Lender-paid structures also explain how no-out-of-pocket closing options work: a higher rate generates a lender credit that offsets some or all closing costs, in exchange for a higher monthly payment. It is a trade, not a gift, and the next section shows the arithmetic.
A Worked Dollar Example: From Rate Sheet to Loan Estimate
This example is entirely hypothetical. The prices, adjustments, and rates are illustrative, not a rate quote and not current market rates.
Suppose a borrower takes a $400,000 conventional purchase loan under a lender-paid compensation structure. Start with the base price for Option A, a hypothetical rate priced at 100.500.
- Base price: 100.500, which is +0.500 points above par. On $400,000 that is a $2,000 credit.
- LLPA deduction: suppose the file’s credit score and LTV trigger a combined adjustment of 0.750 points. That is $3,000 taken off.
- Adjusted price: 100.500 minus 0.750 equals 99.750, or 0.250 points below par. That is a $1,000 cost.
- Broker compensation: 1.5% of $400,000 is $6,000. Under lender-paid compensation this comes out of the price, so the price net of compensation is 99.750 minus 1.500, which equals 98.250.
Wait: the sheet price must actually start high enough to cover comp. To keep this example coherent, treat the sheet price as 102.000 instead of 100.500 for the lender-paid case. Then: 102.000 minus 0.750 LLPA equals 101.250; minus 1.500 broker compensation equals 99.750. That is 0.250 points below par, or a $1,000 net cost to the borrower.
Second scenario: a lower rate that costs points
Now suppose a lower-rate Option B is priced 1.250 points lower on the sheet, at 100.750 before adjustments. Apply the same 0.750 LLPA: 100.000. Subtract 1.500 broker compensation: 98.500. That is 1.500 points below par, a $6,000 net cost.
Option B costs $5,000 more than Option A ($6,000 minus $1,000). Suppose it lowers the monthly payment by $90. The break-even is $5,000 divided by $90, about 56 months. If the borrower expects to keep the loan beyond roughly four and a half years, the lower rate pays back; if not, it does not.
If you want a market benchmark for context, the Freddie Mac Primary Mortgage Market Survey publishes weekly averages, and any figure should be cited with its date.
Comparing Wholesale Pricing Structures Side by Side
The first table describes program focus for roster lenders, drawn from what Duane Buziak documents about each. It describes where each lender is positioned, not what rate it will offer. Specialties not listed here should be confirmed with Duane before relying on them.
| Lender | Primary program focus | Pricing grid used | Broker access |
|---|---|---|---|
| UWM | Agency (conventional, government) wholesale | GSE-based LLPAs plus lender sheet | Approved independent brokers |
| PennyMac | Agency wholesale | GSE-based LLPAs plus lender sheet | Approved independent brokers |
| Newrez | Agency wholesale | GSE-based LLPAs plus lender sheet | Approved independent brokers |
| A&D Mortgage | Non-QM, alternative documentation | Lender-specific grid | Approved independent brokers |
| Angel Oak Mortgage Solutions | Non-QM, alternative documentation | Lender-specific grid | Approved independent brokers |
| Arc Home | Non-QM, alternative documentation | Lender-specific grid | Approved independent brokers |
The second table contrasts how pricing works by channel, in general terms.
| Channel | Rate-sheet access | Compensation disclosure | Number of lenders compared |
|---|---|---|---|
| Wholesale via independent broker | Multiple lender sheets for one scenario | Broker compensation shown on Loan Estimate | Several, depending on program |
| Retail bank | One institution’s pricing | Bundled into rate and fees | One |
| Direct-to-consumer lender | One company’s pricing | Bundled into rate and fees | One |
These tables describe program focus and structure. They are not rate promises, and no lender is ranked above another.
Getting Access: How Duane Buziak Shops Wholesale Pricing for You
Duane Buziak, the Mortgage Maestro, runs one scenario across several wholesale lender sheets and shows you the adjusted results, rather than quoting from a single source. A pre-qualification with Duane does not affect your credit.
To get an accurate comparison, bring:
- Income documents: recent pay stubs and W-2s, or tax returns and bank statements for self-employed borrowers
- Asset statements for down payment and reserves
- A signed credit authorization
- The property scenario: price, intended use, and whether it is a primary home or investment
Homebuyers need that file for agency programs, investors may need rental-income documentation for DSCR or Non-QM options, and realtors referring clients can send the same information on a buyer’s behalf with their consent.
When two Loan Estimates arrive, compare them line by line. Start with the interest rate and any lender credit or points, then Section A (origination charges), where broker compensation or discount points appear. The CFPB’s Loan Estimate explainer walks through each section. Compare quotes with the same lock period and loan program.
Call 804-212-8663 or visit WholesaleMortgageRates.com. Duane is licensed in VA, FL, TN, GA, DC, NC, SC, and MD, and in South Carolina the broker-only structure applies.
The Three-Part Price, and Your Next Step
What you pay is the rate sheet price, minus or plus the adjustments your file triggers, plus disclosed broker compensation. Once you can separate those three, a Loan Estimate stops being opaque and becomes arithmetic you can check.
Your dream home is within reach. Discover how wholesale mortgage rates can put more money back in your pocket while you secure the financing you need. Get your personalized rate estimate today with no credit impact and see exactly what you qualify for with the Mortgage Maestro’s expert guidance. You can also request side-by-side Loan Estimates from Duane Buziak at 804-212-8663.