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Yield Spread Premium
A yield spread premium (YSP) is the money or rebate paid to a mortgage broker for giving a borrower a higher interest rate on a loan in exchange for lower up front costs, generally paid in origination fees, broker fees or discount points. This “may e used towipe out or offset other loan costs, like Loan Level Pricing Adjustments (instituted by FNMA).” References External linksHowell E. Jackson and Jeremy Berry: Kickbacks or Compensation: The Case of Yield Spread Premiums, Harvard Law School — Mortgage News Daily Mortgage industry of the United States {{finance-stub ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
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Origination Fee
An origination fee or establishment fee is a payment charged for establishing a loan account with a bank, broker, or other financial service provider. While origination fees can be a set amount, a tiered amount, or a percentage. Percentages typically range from 1.0% to 5.0% of the loan amount, varying based on whether the loan is in the prime or subprime market. For example, an origination fee of 5% on a $10,000 loan is $500. In the United States, Discount points are used to buy down the interest rate An interest rate is the amount of interest due per period, as a proportion of the amount lent, deposited, or borrowed (called the principal sum). The total interest on an amount lent or borrowed depends on the principal sum, the interest rate, ...s, temporarily or permanently. Origination fees and discount points are both items listed under lender-charges on the HUD-1 Settlement Statement. Regulation Z was enacted to protect borrowers from abusive lending practices. Under this ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
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Broker Fee
A broker is a person or entity that arranges transactions between a buyer and a seller. This may be done for a commission when the deal is executed. A broker who also acts as a seller or as a buyer becomes a principal party to the deal. Neither role should be confused with that of an agent—one who acts on behalf of a principal party in a deal. Definition A broker is an independent party whose services are used extensively in some industries. A broker's prime responsibility is to bring sellers and buyers together and thus a broker is the third-person facilitator between a buyer and a seller. An example would be a real estate broker who facilitates the sale of a property. Brokers can furnish market research and market data. Brokers may represent either the seller or the buyer but generally not both at the same time. Brokers are expected to have the tools and resources to reach the largest possible base of buyers and sellers. They then screen these potential buyers or sellers fo ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
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Point (mortgage)
Discount points, also called mortgage points or simply points, are a form of pre-paid interest available in the United States when arranging a mortgage. One point equals one percent of the loan amount. By charging a borrower points, a lender effectively increases the yield on the loan above the amount of the stated interest rate. Borrowers can offer to pay a lender points as a method to reduce the interest rate on the loan, thus obtaining a lower monthly payment in exchange for this up-front payment. For each point purchased, the loan rate is typically reduced by anywhere from 1/8% (0.125%) to 1/4% (0.25%). Selling the property or refinancing prior to this break-even point will result in a net financial loss for the buyer while keeping the loan for longer than this break-even point will result in a net financial savings for the buyer. Accordingly, if the intention is to buy and sell the property or refinance, paying points will cost more than just paying the higher interest rate. ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |