Lender paid comp/Concessions Guide
Pricing Overview:
Pylon structures its loans using lender-paid compensation (LPC).
When pricing in Pylon, compensation is already included in the price to the borrower (LPC).
Pylon designed its pricing engine this way to provide disclosure consistency around transitioning a borrower to borrower-paid compensation (BPC) can create challenging conversations—particularly around disclosing the exact compensation amount, especially for returning customers—Pylon developed an alternative approach. Pylon provides concessions on behalf of the broker.
This solution preserves pricing flexibility while avoiding the need to disclose the precise compensation paid by the borrower.
Concessions:
How it works:
Concessions can be added by the Loan Officer, directly in Pylon’s Command Center, to decrease the cost of a rate. The new cost for the rate is calculated and the concession is deducted from the loan compensation.
It is important to note the following:
Concessions can be used to buy down rate, but not to provide additional lender credit
Example: 6.375% @ -.065 did not change price
Concessions can be used to buy down to 0 pts, but no more
If the concession exceeds the amount necessary to get to 0 pts, the concession amount will be reduced
Example compensation after applying a concession:
Step 1: The loan is priced out for the borrower
Step 2: The Loan Officer selects the ‘Apply concession’ button, enters in the desired concession amount and then selects ‘Find products’.
Step 3: Pricing is updated with the reduced cost to rate
