What information must be included in the DCA disclosure form regarding the Yield Spread Premium (YSP)?

The Yield Spread Premium (YSP) is a critical aspect of mortgage lending that affects both the costs and benefits of obtaining a loan. The DCA disclosure form must clearly lay out the dollar amount of the YSP and the percentage of the YSP in relation to the loan amount because this information directly impacts the borrower's understanding of the total cost of their loan.

Including both the dollar amount and the percentage provides transparency to the borrower, enabling them to assess how the YSP might influence their financial decisions and the overall cost of the mortgage. This detail is essential for ensuring that borrowers can make informed choices about their loans and can compare offers from different lenders on a more equal footing.

In contrast, while borrowers’ credit scores, the number of months until the first payment, and interest rates for similar loans are also important financial factors, they do not specifically pertain to the YSP itself. Thus, they do not fulfill the requirement for what must be included about the YSP within the DCA disclosure. Focusing on the dollar amount and percentage helps ensure compliance with regulatory requirements while also fostering an informed borrowing process.