How is bases points calculated vs how yield spread is calculated when your making commission off both or individually?

Thanks
JB

Basis Points are calculated based on the loan size. 100 Basis Points = 1%. If you originated a $200,000 loan and you were paid 45 basis points, you would make $900.

Usually banks and large financial institutions are more apt to use Basis Points for commission calculations. They are usually not as favorable as those based on loan revenue.

If you are paid on "Loan Revenue", then that revenue is the sum of the "Yield Spread" (if any) plus any origination and discount points charged.

Originators are usually paid anywhere from 35% to 70% of "Loan Revenue", based on experience and other factors.

Why don't you ask the management of the company who you are working with (or going to work with). If they cannot explain the commission plan, or they are being evasive, find someone else.