Yield Spread Premium (YSP) is a fee paid to a mortgage broker or lender when they offer a borrower a loan with a higher interest rate than the lowest one available for their qualification. This premium allows brokers to cover certain loan-related costs, reducing the borrower’s upfront expenses. However, it may lead to higher payments per month over the loan term. Remember, transparency regarding YSP is more than essential. This is because borrowers need to understand how it impacts the total cost of the loan and long-term financial commitments.