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Help! Can someone explain this to me.
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   General Questions-> Mortgage Loan FeaturesMessage format
Posted 5/30/2008 8:57 PM (#1768)
Subject: Help! Can someone explain this to me.
Hi everyone. I have a question I can't get answered from the bank
I'm dealing with. I am speaking with 2 brokers and I want to be
sure I'm not paying commisions twice.

I want to refinance my home.

$630,000 fha gov jumbo at 5.875%

I think that's a great rate. I was told that the reason the rate
is so great is because the bank is charging me a cost for that
rate. He said SRP and that the amount is added to the loan
balance. He said it's the banks profit. He said he won't earn YSP
because the net price is 98.132. He will only earn his
origination fee of .375%

He then showed me other examples of higher rates, but the SRP was
either lowered or gone and he would earn YSP. I don't really
mind the SRP because it's a great rate considering what I'm
paying now. Plus, if the cost which is around $10,000 is added to
the balance I can live with that.

My question to you all is this. Is the SRP really added to the
loan amount or is this the loan brokers fee and he saying
something different.

Thank you for your time.

Cindy :)
Loan Doctor
Posted 8/24/2008 11:22 AM (#1835 - in reply to #1768)
Subject: RE: Help! Can someone explain this to me.
Posts: 15
This loan officer has ended up confusing things by giving you information that is not needed for you to make your decision.

SRP is what the banks have as a version of YSP. The only difference is that SRP is not shown on the settlement statement, it is hidden from the consumers view, and YSP is clearly stated on the statement.

You are paying to have your interest rate lowered. As long as you are have done the math to make sure that this is a smart thing to do long term (the cost of lowering the rate, vs the savings from the rate being lowered) then it can be a great deal for you.


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