Your lender is either a Mortgage Bank, or a Mortgage Broker using his Corespondent (credit ) line. In either case, the cost of money is less than the rate he is giving you. If I buy a widged for a dollar and sell it for $1.05, then I'm making 5 cents on the sale... money also has a similar markup. The cost of money is less than what he is selling it for.. WilliamAcres.com

We get paid either by the bank/lender AKA lender paid compesation or the borrower. Lender paid compensation is not a line item on the GFE (good faith estimate).

He is getting paid through his lender. I am sure your broker will be willing to lower the rate that he has offered you for a higher origination cost. In other words you can buy down the rate if you want.

Did you receive this: https://www.encompasswebcenter.com/UploadFiles/DefaultFiles/gfe.pdfand read the instructions? It's self-explanatory. Your loan originator should have gone over this with you in it's entirety. Happy funding, Rudi