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A yield spread premium (YSP) is the money or rebate paid to a mortgage broker for giving a borrower a higher interest rate on a loan in exchange for lower up front costs, generally paid in origination fees, broker fees or discount points.
Yield spread can also be an indicator of profitability for a lender providing a loan to an individual borrower. For consumer loans, particularly home mortgages , an important yield spread is the difference between the interest rate actually paid by the borrower on a particular loan and the (lower) interest rate that the borrower's credit would ...
[1] [2] It began in Japan and the United States (US), and spread through the rest of the world. [3] After the recession of the early 1990s , historically low interest rates in many industrialized nations preceded an unexpectedly volatile year for bond investors, including those that held on to mortgage debts.
The Federal Reserve has banned mortgage fees you probably weren't even aware of, but that were inflating your home-loan interest rate. On Monday, the Fed announced it was banning yield spread ...
Mortgage rate history: 1970s to 2024. ... 1990s mortgage rate trends. The 1990s saw a significant shift in the 30-year mortgage rate, which plunged to an average of 6.91 percent in 1998 ...
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In finance, mortgage yield is a measure of the yield of mortgage-backed bonds.It is also known as cash flow yield. The mortgage yield, or cash flow yield, of a mortgage-backed bond is the monthly compounded discount rate at which the net present value of all future cash flows from the bond will be equal to the present price of the bond.
Adjustable rate mortgage or ARM - A mortgage where the interest rate adjusts relative to a specified index + margin. E.g. COFI, LIBOR etc.; Hybrid ARM - An adjustable rate mortgage where the initial 'start' rate is fixed for some portion of time (3,5,7, or 10 years) thereafter the interest rate adjusts (yearly or bi-annually) based on the sum of a specified index + margin.