No Cost Mortgages - How the mortgage companies and loan officers make money. The rate sheet on the previous page is is not a rate sheet designed for public review. In fact, most lenders have a policy that the public cannot see their internal rate sheet. This rate sheet is designed for loan officers and the cost column is the loan officer's cost, not the cost to the borrower. When the loan officer quotes you an interest rate, he will add on a certain amount, usually one to one and a half points.
Most companies leave it up to the loan officer's discretion how much to add on to the base cost.
However, they usually require at least a minimum add-on, which is usually one point. He receives a portion of the add-on and the rest goes to the company. You would pay one percentage point and receive an interest rate of six and three-quarters. If you wanted a lower rate and were willing to pay two points, you could get six and a half percent. In addition to the cost noted on the rate sheet above, lenders have certain other fees they like to collect, too.