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The guy SHOULD care because he will know how much the broker is making off of him. If the broker discloses that he is making 3 YSP then OP is not getting offered the best rate. If OP wants the best rate he should just deal directly with the bank.
Rate really doesn't mean anything to me. A broker could quote someone a 4.75 rate and still make 2 YSP on you depending what par is. It all comes down to what par is for that particular lender.
Your scenario makes no sense whatsoever and is highly unlikely. How does the lower rate pay out more YSP to the broker? Usually, the lower you go on rate the less YSP is going to the broker. Have you ever looked at a rate sheet before?
Your scenario makes no sense whatsoever and is highly unlikely. How does the lower rate pay out more YSP to the broker? Usually, the lower you go on rate the less YSP is going to the broker. Have you ever looked at a rate sheet before?
Quote:
It all comes down to what par is for that particular lender.
Do you think all lenders have the same pricing? I was over exagerating to make a point.
My point was, it doesn't matter what the par price is for that particular lender. What matters is where you can get the best combination of rate and costs.
Your logic would say a borrower is doing good as long as the broker is only making "x" and that is not true.
Your scenario makes no sense whatsoever and is highly unlikely. How does the lower rate pay out more YSP to the broker? Usually, the lower you go on rate the less YSP is going to the broker. Have you ever looked at a rate sheet before?
How about this:
Broker A (still wet behind the ears): 5.0% $3k costs 1.0% YSP
Broker B (seasoned veteran with seemless process): 5.0% $3k costs 1.6% YSP
Broker B is making more money off the borrower's deal, BUT it is not costing the borrower anything extra to use the pro. Broker B just has better pricing.
I may have seen a rate sheet or two.
Being a direct lender and a correspondent lender I don't disclose YSP.
"Par" FHA rate for me today is 4.75% (actaully pays .352 on the back on a 30day lock). I am sure there are some lenders out there with better pricing and some worse. What price are you at for the same deal?
Do you think all lenders have the same pricing? I was over exagerating to make a point.
My point was, it doesn't matter what the par price is for that particular lender. What matters is where you can get the best combination of rate and costs.
Your logic would say a borrower is doing good as long as the broker is only making "x" and that is not true.
Yes I agree to a point, in the end what matters is the entire combo but I would also be looking at how much YSP the broker is making if I can as part of the deal.
Broker A (still wet behind the ears): 5.0% $3k costs 1.0% YSP
Broker B (seasoned veteran with seemless process): 5.0% $3k costs 1.6% YSP
Broker B is making more money off the borrower's deal, BUT it is not costing the borrower anything extra to use the pro. Broker B just has better pricing.
I may have seen a rate sheet or two.
Being a direct lender and a correspondent lender I don't disclose YSP.
"Par" FHA rate for me today is 4.75% (actaully pays .352 on the back on a 30day lock). I am sure there are some lenders out there with better pricing and some worse. What price are you at for the same deal?
I would rather pay more upfront in origination and get a lower rate than having to pay YSP on the back end. Anyways, I couldn't tell you what par rates are these days since I haven't been following rates for a while now. I know when I closed my loan back in May 09. I got 4.75% which paid .025 to the broker and paid 1% origination.
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