Do mortgage brokers get any incentive or points for locking you into a 5 year ARM rather than a 30 year fix.
Thank you.
The only incentive they might have is higher YSP on the same interest rate as a 30 yr fix. Right now rates are so close it’s probably worth paying a little higher rate for the 30 yr if you are keeping your property.
What does YSP stands for?
Thank you.
yield spread premium
the difference between par interest rate and your interest rate. It works as a teeter totter with points. If you accept a higher rate then you will have to pay less points upfront. If you want the lowest rate, you pay the most points.
Just as there is competition between Brokers, there is competition between banks that want brokers to use them. YSP is what a mortgage Lender offers a broker, in compensation, to bring the loan to them.
As Mark mentioned, you can get just about any rate that you want for your mortgage. It just depends on how much you are willing to “buy” the rate down.