How to Read a Wholesale Rate Sheet

A wholesale rate sheet is the price list a lender sends to mortgage brokers. It updates multiple times a day, sometimes every few hours when bond markets are moving, and it tells a broker what the lender will pay, or charge, for a given loan at a given rate. Get the read right and you know what a deal is worth before you touch a submission button. Get it wrong and you either misquote a borrower or hand back money that should have ended up in your pricing. Two things drive the whole page: a base price for each note rate, and a grid of adjustments known as loan-level price adjustments, or LLPAs. Everything else printed on that sheet is just commentary on one of those two numbers. ### Base Price Look at the base price grid first. Down the left column sit note rates, 6.000%, 6.125%, 6.250%, stepped in eighths or quarters depending on the lender. Across from each rate is a price, quoted as a percentage of loan amount, out to the thousandth decimal. A price of 101.250 at 6.250% means the lender pays 101.250% of the loan balance for that loan, at that rate, before anything else touches it. Prices above 100 are premiums; the lender pays more than par because the note rate throws off more interest income than the market currently requires, and that excess gets capitalized into cash today. Below 100, you're in discount territory, where the rate isn't rich enough to sell at par in the secondary market, so the lender needs more up front to make the math work. Every rate carries its own price point, and the base grid typically spans a percentage point or more, which is what gives a broker room to shop pricing against what a borrower actually wants to pay monthly. None of it is guesswork. Base prices track mortgage-backed securities trading in the to-be-announced, or TBA, market, since most conventional loans get pooled into Fannie Mae or Freddie Mac MBS not long after closing. The underlying coupon trades up, the sheet updates, sometimes several times in one session. Brokers who watch MBS prices tick down mid-morning already know a repricing notice is coming before the lender bothers sending one. ### The LLPA Grid Base price assumes a plain vanilla loan. Strong credit, healthy equity, owner-occupied, single unit, full documentation. Almost nothing that crosses a broker's desk actually looks like that, which is the whole reason LLPAs exist: they price in every way a real loan deviates from that fictional baseline. This grid is where reading a rate sheet stops being arithmetic and starts being judgment. At minimum, the grid cross-references credit score bands against loan-to-value bands. Find the borrower's FICO row, find the LTV column, and the cell where they meet gives a number, in points, that gets subtracted from base price. A 680 score at 80% LTV might run 1.750 points. A 740 at the same LTV might cost only half a point. That gap isn't cosmetic; it reflects the actual, measured difference in default frequency between those two borrower profiles, priced off decades of loan performance data that Fannie and Freddie (or whichever investor's grid the lender is running) maintain and update. Credit and LTV only get you in the door. Separate adjustments stack for cash-out refis, investment properties, condos, manufactured housing, loan balances that push against the conforming limit, and adjustable-rate structures. Stack a cash-out refi on an investment property with a sub-700 score and you can be looking at four or five line items before you ever reach a final number. Each is its own row, and each one subtracts. They almost never add. New loan officers blow this step constantly. They quote off the base sheet, forget to run the stack, and hand the borrower a number that bears no relationship to what the loan actually funds at. I've seen it happen on a file that looked clean on paper, an investment condo, mid-700s score, until someone remembered condos carry their own adjustment on top of everything else. Experienced originators run the grid before a number leaves their mouth. The borrower remembers whatever they heard first. ### From Price to Payout Numbers make this land better than description. Loan amount: $400,000. Note rate: 6.250%. Base price: 101.250. Before any LLPAs touch it, that loan is worth a 1.250-point premium to the lender, or $5,000. The lender pays that because the 6.250% coupon, once it's pooled and sold, yields more than the market demands right now, and the excess gets monetized up front rather than collected over thirty years. Now run the stack. Say the borrower carries a 700 score at 75% LTV, a 0.500-point hit, and it's a cash-out refi, another 0.750. That's 1.250 points total, which lands exactly on top of the premium and cancels it. Net price sits at par, 100.000, and there's nothing left over to pay anyone. Nudge the LTV to 85%, or drop the score into the 660s, and net price can flip below par entirely, which means the loan now costs money to originate at that rate unless the broker bumps the note rate to buy back price, or the borrower pays discount points to cover the gap. Price above par funds a rebate. Price below par demands a charge. That's the whole mechanical skeleton of wholesale pricing, and it explains something borrowers find strange: the same person, same day, same loan, can get real daylight between quotes from two lenders. Each one runs its own LLPA grid, built on its own risk appetite and its own execution in the secondary market, even when both are pricing off the identical MBS coupon that morning. ### Margin Lives in the Spread Broker compensation comes out of the gap between net price and whatever price gets quoted to the borrower. Loan Officer Compensation rules put guardrails on how that margin can be structured, but underneath the compliance language, it's the same premium-and-discount math, just run a second time between wholesale and retail. That's also why a rate sheet can't be treated as a reference document you check once in the morning. Yields move all day, the ten-year Treasury especially, along with MBS spreads on top of it. Move enough, and the lender pulls the sheet and reissues it, sometimes with base price untouched but LLPAs revised, sometimes the other way around. Quote off a sheet that's twenty minutes old and you're trusting the lender to honor a price it may have already withdrawn. Reading the sheet is not clerical work, whatever the job title implies. It separates a quoted rate from a rate that actually survives underwriting, the LLPA stack, and the lock desk without blowing up. Manufactured housing adjustments get missed. Second-home status gets missed. Both have killed files late in the process, and both are sitting right there on the grid the whole time, waiting to be read line by line, every single time, no exceptions.