Which of the following would be entered as a negative number on the Loan Estimate?

The yield spread premium (YSP) represents the compensation a lender offers to a mortgage broker for agreeing to an interest rate higher than the minimum accepted rate. When the borrower receives a YSP, it is typically beneficial as it can help cover other costs, but from a numerical standpoint on the Loan Estimate, it should be recorded as a negative number.

This negative entry indicates a credit to the borrower because it effectively reduces the overall cost of the loan. By recording it in this manner, it provides a clear representation of how the higher rate is equated to a benefit or cost savings elsewhere in the transaction for the borrower.

In contrast, other options like discount points, loan origination fees, or prepaid interest are costs incurred by the borrower and will be entered as positive numbers on the Loan Estimate. These costs directly influence the total amount the borrower has to pay upfront, while the yield spread premium serves as a credit to offset such costs.