There seems to have always been a great mystery surrounding mortgage fixed rates and how they vary from mortgage lender to mortgage lender.  No matter if you are seeking a local banks’30 year fixed rate, googling for fixed mortgage rates online, or gaining trusted advice from your favorite Florida mortgage professional; determining the fixed rate works the same for everyone.

First, the bank loan office, mortgage broker or mortgage lender determines the profit margin for their business.Banks earn servicing release premiums (SRP) while mortgage brokers or lenders earn yield spread premiums (YSP).

If 1.5% were the goal for a bank or mortgage lender; and 6.500% for a 30 year fixed rate mortgage were paying about 1.5% then all is well. The problem is mortgage lenders and brokers have to disclose the YSP to consumers while banks are not required to disclose their SRP.

Everyone in Washington believes mortgage brokers and lenders raise fixed rates that consumers would otherwise be entitled. The truth is, if mortgage brokers and lenders were raising rates, without even charging discount points and origination fees (some banks do), then why are bank rates not any lower? We earn a living the same way banks do. Only, we disclose the whole truth.

Mortgage disclosures are very regulated here in Florida and I am glad to be an upfront disclosing mortgage professional. I only wish banks were as upfront with either lowering their mortgage rate to not earn their SRP or at least disclosing the fact that it exists and consumers are paying for it.

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