Yield Spread Premium

What is Yield Spread Premium? It is the money the broker is paid on the back end of the loan by the lender. It is usually expressed as a percentage of the loan amount and should be disclosed on your good faith estimate and mortgage brokerage contract. The premium is usually earned in addition to any up front broker fees and is always paid at closing and disclosed on the HUD-1 Settlement Statement. Most lenders limit the amount of yield spread premium a broker can make, usually no more that 5% of the total loan amount.