What are your rates sheets asking for?
Rate sheets are built with biases-sometimes intentional, sometimes accidental-that shape your loan originations. They're a critical factor in whether a potential borrower or TPO (Third-Party Originator) decides to do business with you or turns away. They can even drive the borrower's likelihood to exit your pipeline before closing, increasing your fallout and cost to originate.
A poorly crafted rate sheet sets you up to be arbitraged by borrowers and TPOs. You will be selected when your price is too aggressive, or you could be out-of-the-money on the loan product you most desire.
It's about control and knowing your goals.
The "golden rule" holds true here: the one who holds the gold makes the rules. Your rate sheet should align with your goals-whether you're keeping the loan for investment or selling it into the secondary market. If you're holding it, the pricing should reflect all associated costs such as cost of capital, operating expenses, and internal credit risk assessments.
Tomorrow we'll dive into a step-by-step guide to building a rate sheet that maximizes your returns in the secondary market.
> > As featured in Les Parker's TMSpotlight "Follow" daily newsletter: You can't always get what you want, but you'll get what your rate sheets ask for!
