Just need some clarification regarding a concession? When I told my current lender we were considering refinancing with another lender at 5 % 0 points he replied that he could offer us 4.875 0 points. I contacted Countrywide/BofA that day and was told 4.875 was with a 1 point charge. I knew my LO worked some magic to get us that rate.  In a recent conversation with him he said that he used a concession to get us that rate.  Just not quite sure what that means other than got some authorization to give us that rate?  Now that rates seem to be dropping, he mentioned if rates drop .5 % more before closing he can grab that rate without additional fees. However, would we have to see rates drop to 4.375 0 points or 4.5 and he could still use a concession to get us a rate of 4.375?

I hope this is accurate but as a first-time homebuyer it probably isn't! Anyway, I believe what the concession entails is your LO providing some of the finder's fee toward a buy down in the rate. In other words, he is providing you a 0 point rate when in actuality he just bought the point (or whatever points it took to get the rate). Our broker is doing a concession for us by buying down the interest rate for the first two years. With her being a long-time family friend I'm not sure if this practice is common (I'm pretty sure it isn't).

The LO probably just reduced the margin on the loan. Rates are set by the secondary market but there is always some variance between lenders. We have seen a strong improvement in pricing this week so he is probably just passing along the gains and working for less.

If you are working with a retail lender, the concession could be authorization from a manager to offer a loan with a better deal than what is reflected on the retail ratesheet.

So did the rate my LO offered me cost my lender (Countrywide/BofA) money?  Unless rates drop to 4.375 0 points on retail rate sheets I shouldn't expect him to grab me a lower rate than what I currently have since it may have cost him initially to get me the rate they offered? He mentioned that the rates must drop .5 % to get it a lower rate without charges but I imagine that would be the retail ratesheets?

Sorry (not too sorry) but Christina are you really trying to refinance? You have several threads regarding your situation and some wonderful insight provided by mortgage professionals.  If you need a date, hit another site Otherwise  I think you are "locked and loaded".

Sorry Bob (not too sorry) that my threads seem to bother you. Just trying to get as well informed as possible on topics that I am not familiar with. I'm not looking for a date since I am happily married.