Current Mortgage Rates
Saturday, September 06, 2008
No, it is not safe to ignore lender payments to your broker. Yield Spread Premium (also know as a lender rebate): The rate at which a mortgage broker is compensated for the difference between the interest rate on a par loan and the interest rate on an above par loan, which a broker can deliver to the lender. This is expressed in the number of points paid to a broker. A broker receives payment of the premium, the lender obtains a higher than par loan, and the borrower pays for the premium over the entire life of the loan.
For example, if the interest rate on a par loan is 7% and the mortgage broker can deliver a 7.5% loan to the lender, the lender may be offering to pay the mortgage broker a rebate of 2 points or 2% of the loan value. For a $100,000 loan, the broker would be paid a $2,000 Yield Spread Premium by the lender and the borrower would have to pay a higher interest rate over the life of the loan. Always ask your broker if rebate pricing is involved on your loan; a broker must disclose any rebate they are to receive in connection with your loan to you.
For example, if the interest rate on a par loan is 7% and the mortgage broker can deliver a 7.5% loan to the lender, the lender may be offering to pay the mortgage broker a rebate of 2 points or 2% of the loan value. For a $100,000 loan, the broker would be paid a $2,000 Yield Spread Premium by the lender and the borrower would have to pay a higher interest rate over the life of the loan. Always ask your broker if rebate pricing is involved on your loan; a broker must disclose any rebate they are to receive in connection with your loan to you.
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Current Mortgage Rates*
Loan Type National Average |
|
| 30-yr. fixed | 6.38% |
| 30-yr. fixed jumbo | 7.00% |
| 15-yr. fixed | 5.88% |
| 15-yr. fixed jumbo | 6.50% |
| 7/1 ARM | 6.25% |
| 5/1 ARM | 6.00% |
| 3/1 ARM | 5.88% |
| 1-yr. ARM | 6.00% |
| 1-yr. LIBOR ARM | 5.50% |
| 10/1 ARM | 7.88% |
*Mortgage Rates Updated: 09/04/2008