The yield spread premium (YSP) is the payment a lender makes to a broker for selling mortgages above-par.
When a loan that originates from a lender has zero points, it is a par loan.
When the interest of these loans go below par, the lender has to charge points in the settlement costs so as not to make a loss from the get-go.
It’s not as if we are walking into a clinic and demand to know that the doctor is a licensed practitioner of medicine.
But for some reason, it is really disturbing should one find out that the loan officer attending to your mortgage concerns is actually moonlighting from Walmart.
The truth is that that conclusion is only partly true. Most moonlighters will be moonlighting from somewhere else.
The appraised value is the value of a property in the expert opinion of a qualified appraiser or valuer.
Factors that play a part in valuation include:
An appraisal is most often conducted in the stage of a real estate transaction process where the lender needs to obtain a professional opinion of the real value of the property in question so that they do not underwrite a mortgage above the appraised value.
The real estate value chain refers to the different stages of a property transaction where value is added by various parties providing their own specific set of skills.
It is sort of like how the supply chain is illustrated of how raw material is transformed into an end-product that ends up on the shelf of a supermarket and finally in the home of a consumer.
Some of the more significant players in the real estate value chain include the below.