What is a Mortgage Rate Sheet?

A  mortgage rate sheet provides daily information on the wholesale cost of loans. All loan brokers, your mortgage representative included, will have access to a mortgage rate sheet each day. You can ask to see this sheet in order to find how much the lender is up-selling the loan, called the "yield spread premium."

Yield Spread Premium

A yield spread premium is basically just a markup on a loan so the broker can make money on the deal. All brokers will have to charge a markup so they can earn a salary and stay in business. Ethical brokers will tell you exactly what that markup is. It is best to look for the lowest markup possible, and some brokers will actually reduce this fee to very close to zero.

Origination Fee

A broker can charge close to nothing in yield spread premium and still profit due to origination fees. Origination fees are simply the cost of taking the broker's time in order to source the loan and establish contracts. A typical origination fee is 1%. You should be aware of any change in this fee or the actual rate on the mortgage between the quote phase and the signing phase. Some brokers will "bait" borrowers with low fees then assume higher rates on closing day.

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