Posted on: 04th May, 2009 01:23 pm
How can I avoid paying too much to the broker and not pay the YSP?
You, the consumer, do not pay the YSP(Yield Spread Premium). The lender will pay the broker the YSP depending on the rate given. The broker will not earn YSP from the lender if they offer you the lowest possible rate. Typically, the broker will offer you low closing costs with a higher interest rate or they can offer you the lowest possible rate and a little bit more in fees. I would suggest you determine which will benefit you more at this point. Will it be the lower rate or lower closing costs? If this is a purchase transaction, you may want to keep as much in the bank as you can and take a little bit higher monthly payment which comes from a higher rate. I hope this helps...