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Nairaland Forum / Nairaland / General / Investment / How Mortgage Excess Servicing Works (110 Views)
Where Mortgage Excess Servicing Comes From / What Is Mortgage Excess Servicing? / Swap Your Pi and excess Airtime For Naira Sweet Rate (2) (3) (4)
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How Mortgage Excess Servicing Works by BigTolulope(m): 11:13pm On May 23 |
How Mortgage Excess Servicing Works A servicing fee is the percentage of each mortgage payment made by a borrower to a mortgage servicer as compensation for keeping a record of payments, collecting, and making escrow payments, passing principal and interest payments along to the note holder. Servicing fees generally range from 0.25% to 0.5% of the outstanding mortgage balance each month. The mortgage excess servicing fee typically goes to the servicer of the loan and may serve as a guarantee fee for the underwriter of the MBS. For example, in a typical MBS deal, if the interest rate on a mortgage is 8%, the MBS holder might receive 7.5%, the servicer of the mortgage receives 0.25% servicing fee and the MBS underwriter gets 0.15% This leaves the remaining 0.10% (8% - 7.5% - 0.25% - 0.15% = 0.10%) as excess servicing. Mortgage excess servicing for MBS is subject to prepayment and extension risk. When excess servicing is priced, it is valued based on an estimate of how long the annuity will last. This must be estimated since it cannot be known for certain when a mortgage borrower might refinance or otherwise pay off his or her mortgage. The value of excess servicing can change dramatically when interest rates change, because changes in current interest rates relative to the interest rate on the mortgage determine how long the annuity of excess servicing associated with that mortgage might last. |
Re: How Mortgage Excess Servicing Works by Agricpact: 2:21am On May 28 |
Can I get mortgage for my uncompleted building structure in Anambra State? |
Re: How Mortgage Excess Servicing Works by BigTolulope(m): 12:01pm On May 29 |
Ask your bank manager for how to go about it. |
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