Refinance Home Mortgage Guide

A time for many people to start thinking about mortgage refinancing is when they are headed for foreclosure. Many people get into trouble because they are not able to keep up with their payments; the payment is either larger than they anticipated or their finances have taken a turn for the worse and they can no longer afford the mortgage.

Foreclosure is a scary thing; however, instead of waiting for the lender to foreclose why not refinance and keep your home?

Save Your Home by Mortgage Refinancing

When you find yourself under water and cannot afford your mortgage payments don’t just stand by and let foreclosure happen. Take action instead of defaulting on the loan. Refinancing your mortgage can be as simple as filling out a form on the Internet and your problem could be solved. Lowering your monthly payment by 50 to 100 dollars could mean the difference between making or breaking your finances.

Mortgage refinancing can also save you money. There are a number of programs available to reduce your mortgage rate and payment. Depending on the type and amount of your current mortgage you could knock several points off your interest rate. Doing a bit of comparison shopping could surprise you just how much you can save every month.

Mortgage Refinancing Help is Available

If you don’t think you’ll qualify or that help is available to you, consider contacting your current lender about a payment arrangement or forbearance. Mortgage lenders don’t want to foreclose on your home; foreclosure is a losing proposition for everyone. Don’t sit back and watch your home and finances slip away…pick up the phone and call your existing lender. There are also government programs for homeowners with Adjustable Rate Mortgages that you might not know about. FHASecure mortgages are one such program. There are other programs available for homeowners with fixed rate mortgages.

Mortgage refinancing could be the lifeline you need to save your home. The best way to get started refinancing your mortgage is to contact a local mortgage broker. There are risks involved when dealing with mortgage brokers; most will markup your rate for a commission and frequently slip junk fees into your contract. You can learn how to avoid this markup and junk fees by registering for the free videos found on this website. Register today and you’ll receive a list of recommended mortgage brokers in your area that do not mark up mortgage rates for a commission. You can find out more about the free videos using the links at the top of this page.

If you are in the process of refinancing your home mortgage loan, getting a good deal from a reputable lender is probably at the top of your to-do list. The mortgage industry has suffered a major setback in the United States recently with lenders tightening their standards and cutting corners on loan offerings.

In the midst of the so-called “credit crisis” how can you be sure that you’re getting a good deal on your mortgage rate and aren’t paying garbage fees to the broker or lender? Here are several tips to help you find the lowest refinance mortgage rates for your home loan when refinancing.

Understanding Mortgage Rates

Mortgage shopping for most people involves collecting rate quotes from a few online lenders or calling a broker out of the phone book. Some people ask for a Good Faith Estimate and compare fees; however, very few people actually understand how mortgage rates are quoted and nearly everyone pays too much for their home loans. What most people don’t understand is the “retail” nature of mortgage interest rates.

Mortgage lenders operate their businesses on a wholesale basis. They do not lend directly to the public but rely on mortgage brokers to resell their loans. There is one exception; nearly every wholesale lender operates a retail division. You might think that you can avoid retail markup on your loan by contacting the lender directly and skipping the mortgage broker…if you try this you’ll be dealing with their retail operation and paying the same markup of your mortgage rate.

Mortgage Refinance Rates

Why are mortgage rates marked up? Like any other retail mortgage refinance rates have been marked up to give a commission to the broker arranging the loan. This markup is called Yield Spread Premium. Understand how Yield Spread Premium works and you can save yourself as much as several thousand dollars every year that you keep the loan.

How does Yield Spread Premium work? When your mortgage broker submitted your loan application they “mark up” your mortgage rate higher than the lender is willing to approve you to get a commission. Your mortgage broker might be telling you that you qualified for a 6.75% mortgage rate; however, what there not telling you is that you could have been approved at 6.25%. The broker marked up your mortgage rate by .50% because the lender pays them a bonus of 1% for every .25% they overcharge you. On a $250,000 loan that bonus is $5,000 on top of whatever origination fee you agree to pay for their services.

What does this .5% markup mean for your monthly payment amount? If you had refinanced with the mortgage rate you deserve at 6.25% your monthly payment would be approximately $1500 on a 30 year fixed rate mortgage. Dial that up to 6.5% and you’re paying an extra $960 every year just to give your mortgage broker a bonus.

There is good news for homeowners that do their homework before refinancing. You can avoid paying this unnecessary markup of your mortgage interest rate without paying junk fees to the lender and broker with my free mortgage refinancing system. Register today and you’ll get immediate online access to the videos, a list of recommended brokers in your area and everything you need to secure the lowest possible rate when refinancing your home loan.