| Yield Spread Premium is a technical term for your | | | | qualified you for a 6% loan and the broker sold you on |
| Mortgage Broker robbing you blind. You won't find the | | | | 6.5%. Why would the broker do this? They are after |
| term in any of your loan documents; however, you | | | | all independent agents correct? |
| could be overpaying for your new mortgage and not | | | | What you don't know about your mortgage broker, |
| even know it. How can you avoid overpaying for your | | | | unless you know where to look in your mortgage |
| new mortgage? Here are the basics of Yield Spread | | | | documents and will never know about your Broker |
| Premium and how you can avoid paying too much for | | | | Bank because they are not required to disclose their |
| your mortgage loan. | | | | profit margin, is that they receive a bonus from the |
| Mortgage brokers come in two flavors. There are | | | | lender for overcharging you on the interest rate. You |
| traditional brokers regulated by RESPA legislation, and | | | | probably had to pay the broker origination points for |
| Broker-Banks that are not subject to disclosure laws | | | | the loan in the neighborhood of 1-1.5% of the loan |
| under the Real Estate Settlement and Procedures Act. | | | | amount. Did you know the broker received an |
| It is difficult to distinguish a mortgage broker from a | | | | additional 1-1.5% of your loan amount for each .25% |
| broker bank. Broker-Banks are a particularly evil | | | | they overcharged you on the interest rate? This bonus |
| variety of mortgage lender that does not have to | | | | is called Yield Spread Premium (YSP) when it's paid to |
| disclose any of the fees they overcharge you for you | | | | broker and Service Release Premium (SRP) when the |
| home loan. Mortgage brokers operate the same | | | | scam is by a bank. |
| scams; however, they are required to disclose under | | | | How can you avoid being taken advantage of by your |
| RESPA. Here's how their scams work. | | | | broker or bank? First of all, never, ever take out a |
| Mortgage brokers and Broker Banks make their profits | | | | mortgage from a bank. Second, you must determine if |
| by up selling you on the interest rate you qualify on the | | | | the broker you are working with is an actual mortgage |
| mortgage loan. Suppose a broker talks you into taking | | | | broker or a Broker Bank. Chances are they will not tell |
| out a mortgage for 6.5%. You agree because this | | | | you if you ask; however, there is an easy way to tell. |
| seems like a fair rate the way the economy has been | | | | You can learn more by registering for a free |
| going. What you don't know is that the lender actually | | | | mortgage guidebook. |