Understanding YSP
Yield Spread Premium, or YSP, is an additional compensation you earn by offering loans at an interest rate slightly higher than the base rate (par rate). This is a common practice in the lending industry, allowing brokers to earn more without affecting client relationships or loan terms negatively.
Why YSP?
Increased earnings
By adding YSP, you can significantly increase your commission on each loan, potentially doubling your earnings.
Flexibility
It offers flexibility in how you structure your compensation, providing an additional stream of revenue.
Competitive edge
Allows you to offer more competitive services and support to your clients, bolstering your reputation and client satisfaction.
Pre-qualification and loan application
Begin by getting pre-qualified through our easy-to-use online platform. Here, you'll have the opportunity to select the loan option that best suits your needs, including the addition of YSP.
Loan processing
Once your loan application is complete, it moves to processing and is assigned to a loan processor. During this stage, you can adjust the loan's interest rate to include YSP.
Finalization
After underwriting approval, you're ready to close. The added YSP will be part of the final loan terms, with the adjusted interest rate being what the borrower agrees to and signs off on.
Fix-and-flip and bridge loans
YSP compensation is determined by the adjusted interest rate and becomes payable once the loan is fully funded and confirmed to be in good standing. YSP payout occurs at the end of the month following the month in which the loan has been fully paid off. This ensures that your compensation is disbursed in a timely manner, reflecting the actual duration of your involvement with the loan. For instance, if a loan is settled within 3 months, your YSP compensation will be calculated based on those three months and disbursed according to the new payout schedule.
Rental loans
The structure of YSP compensation for rental loans is designed with the broker's financial growth in mind. Unlike with fix-and-flip and bridge loans, the YSP on rental loans isn't split up over time—it's all yours right away. You get the full amount at the end of the month after the loan closes. This means you get a quick, solid payout right after the deal is done, helping you keep a steady cash flow. It's our way of saying thanks for the hard work you put into securing the loan.
Kiavi's broker portal
Our broker portal simplifies the process of adding YSP to your loans. With intuitive tools and a transparent pricing model, you can easily manage your compensation preferences and track your earnings in real time.