Glossary of Mortgage Terms
Y
- Yield
- is a measure of the amount of income (return) an investment generates over time. It is usually expressed as a percentage of its price. A bond's yield is its annual interest rate (coupon) divided by its current market price. When a bond's price rises, its yield drops, and vice versa. In general, the higher a bond's credit and interest rate risk, the higher its yield.
- Yield Spread Premium (YSP)
- A rebate paid to a mortgage broker based on selling an interest rate above the wholesale par rate that the borrower qualifies for.
- Yield to Maturity
- tells you the total return you will gain from a bond if you hold onto it until it matures (is paid back) or is called (is bought back). It includes the par value (or face value), the total interest you have earned on the bond, and any gains or losses in its market price.