Are you thinking about refinancing your home loan online? The Internet makes refinancing fast and hassle free; however, it is very easy to pay too much during the process. There are hidden fees and markup of your mortgage rate charged every time you refinance home loans online; unless you know how to avoid paying them. Here are several tips to help you refinance home loans online without paying too much in the process.

Refinancing Your Mortgage Online

The Internet makes it easy to contact lenders and collect a variety of mortgage quotes when refinancing. The problem with the mortgage quotes you collect on the Internet is that 99% of them have been marked up to create an “extra” commission for the mortgage company or broker arranging your loan. This “extra” commission is in addition to the perfectly reasonable loan origination fee (not more than one percent of your home loan) you’re already paying them for their services. (maybe even overpaying)

How does this markup work? Lenders reward mortgage companies and brokers that lock and close home loans with higher than necessary interest rates with a commission known as Yield Spread Premium. There are also a number of completely unnecessary junk fees they’ll attach to your loan such as “Computerized Loan Origination Fees” and “Mortgage Broker Courier Fees.” The good news is that once you learn to recognize this markup of your mortgage interest rate you can avoid paying it when refinancing, even avoid junk fees at closing.

How to Recognize Yield Spread Premium

The easiest way to avoid Yield Spread Premium is to be upfront with your mortgage brokers. Tell your broker that you understand how Yield Spread Premium works and will not accept any home loan that includes this commission based markup. Many mortgage brokers become defensive or angry when you ask them about Yield Spread Premium. If your mortgage broker does this you should simply find someone else to arrange the home loan for you.

Just because your broker agrees not to take Yield Spread Premium on your loan doesn’t mean you should take their word for it. Mortgage brokers have clever ways of hiding their markup in your loan documents and if you don’t know what to look for you could miss it. The first opportunity you’ll have to catch Yield Spread Premium on your home loan is when you lock in your mortgage rate. Make sure that you get written rate lock confirmation from the lender. Never accept verbal rate lock confirmation or accept a written rate lock on your mortgage broker’s letterhead. If your written rate lock didn’t come from the lender you haven’t locked your mortgage rate. Dishonest mortgage brokers often pass off bogus rate lock confirmation written on their own letterhead to hide their markup of your mortgage rate…don’t fall for this trick.

How to Get the Lowest Mortgage

Your last opportunity to catch Yield Spread Premium before closing is on the HUD-1 settlement statement. Make sure you get a copy of the HUD-1 before signing your loan contract and pay close attention to section 800 of this document. Yield Spread Premium will be disclosed as a fee paid to your broker listed in section 800 of the HUD-1. Other junk fees such as computerized loan origination fees and mortgage broker courier fees will also be listed on the HUD-1. You should question any “broker” fee listed on the HUD-1 other than your loan origination fee with a healthy dose of skepticism, including any loan processing fees.

How to Find the Best Mortgage Broker

If you’re having trouble finding a mortgage broker willing to work for a flat one percent origination fee without taking Yield Spread Premium, here are several tips to help you locate one. Your best bet in locating a mortgage broker that will not charge you Yield Spread Premium is to look for one that is self-employed. These brokers, especially ones working out of their homes do not have the overhead of larger brokerage firms and will be much more likely to negotiate the home loan you are looking for.

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If you are considering purchasing your home or refinancing an existing home loan, Yield Spread Premium is something you’ll unknowingly encounter that could cost you thousands of dollars per year in unnecessary mortgage interest. You can avoid hidden markup of your mortgage rate once you learn how to recognize and negotiate Yield Spread Premium. Pay attention, the following discussion will literally save you thousands of dollars every year and help you find the best mortgage deals on your next home loan.

Yield Spread Premium Definition

Yield Spread Premium (YSP) is a fee paid by mortgage lenders for home loans that are closed with higher than necessary mortgage rates. The amount of the fee depends on how much you overpay. Mortgage companies and brokers typically get one percent of your mortgage amount for every .25% you agree to overpay for your home loan. Most of the time the mortgage broker will not tell what they’ve done and brokers go to great lengths to hide their markup of your mortgage rate in your loan documents.

How Does YSP Result in Overpaying?

The example I’ll use to illustrate Yield Spread Premium has to do with Refinancing Home Mortgage loans but applies also to purchase loans. Suppose you are in the market to refinance your home loan for $305,000 and your mortgage broker quotes you an interest rate of 6.75%. What your broker isn’t telling and doesn’t want you to find out is that you actually qualified for a mortgage rate of 6.0%; however, they’ve marked up your rate for Yield Spread Premium (YSP) from the lender.

Not only is the lender paying your mortgage broker this fee for overcharging you, adding insult to injury your broker is charging you a fee for the privilege of being ripped off. This loan origination fee is all you should be paying for the mortgage broker’s services and you should only agree to pay one percent of your home loan amount, and not a penny more.

In this example your monthly payment on a $305,000 thirty year, fixed rate mortgage at 6.75% will be $1,980 per month. If you had the interest rate you could have refinanced with at 6.0% your mortgage payment would only be $1,820 per month. That’s $1,920 you’re throwing away every year because your mortgage broker overcharged you! The good news is that this unnecessary markup of your mortgage rate can be avoided.

How to Avoid Yield Spread Premium (YSP)

You can save yourself a lot of money by refinancing your home loan paying just a flat one percent origination fee without Yield Spread Premium. Instead of shopping for your next home like everyone else, think of finding the right person to arrange your next mortgage rather than shopping for the “perfect” rate quote. If you’re thinking the right person to arrange your next mortgage is actually your bank, think again. Banks don’t offer the kind of deal I’m describing here due to a loophole in the Real Estate Settlement Procedures Act. They’re simply not required to tell you about their markup or profit margin on your loan. They don’t have to play by the same rules as other mortgage lenders so why would you expect them to give you competitive rates? Banks prey on homeowners that just don’t know better.

How to Find the Right Mortgage Broker

Finding the right mortgage broker to arrange your next mortgage isn’t difficult. Start by telling mortgage brokers you approach that you’re willing to pay a reasonable fee for loan origination but will not accept any mortgage that includes Yield Spread Premium. Your best bet for finding the right person to arrange your next mortgage is to find a self-employed mortgage broker. Large firms employ sales staff with expensive overhead and will simply be unwilling or unable to negotiate the kind of deal that doesn’t include Yield Spread Premium (YSP).

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Are you considering refinancing your home loan and are searching the Internet for the best refinance mortgage?

If so, there are several things you should know about the mortgage rate quotes you find online, even those from your local mortgage broker.

Here are several tips to help you find the Best Refinance Mortgage while avoiding paying too much in interest rate markup and mortgage junk fees.

Finding the Best Refinance Mortgage Online

Did you know that 99% of the mortgage quotes you get today have been marked up to give someone a commission? This is a commission you’ll pay in addition to the loan origination fee. Does it make sense to pay double for your mortgage loan? The problem accepting a mortgage rate quote that includes markup for a commission is that you’ll keep paying the mortgage broker’s fee over and over again every year for as long as you keep the loan. Doesn’t it make more sense to pay a flat mortgage origination fee of one percent and get the broker out of your life for good?

Mortgage Broker Markup

So what is this nefarious markup of your mortgage interest rate that costs the average homeowner $1,200 per year? Simply put, mortgage brokers get a kickback from lenders for locking and closing your home loan with higher than market rates. What are market mortgage rates? Also known as “par” mortgage rates, this is one that does not cost you discount points to get and does not create a kickback for your broker. Here’s how it works. Your mortgage broker quotes you an interest rate based on how much they think you’ll agree to overpay. The broker knows what mortgage rate you were approved for; however, for every .25% they overcharge you the lender pays the broker one percent of your loan amount in addition to the origination fee you’re probably overpaying for the broker’s services.

How to Avoid Yield Spread Premium

This kickback paid the lender for the mortgage broker overcharging you is called Yield Spread Premium. Most homeowners have never heard of Yield Spread Premium and the abuse is so rampant that the Secretary of Housing and Urban Development recently stated American homeowners will overpay sixteen billion dollars this year alone because of it.

Fortunately Yield Spread Premium can be avoided. There are a handful of honest mortgage brokers out there willing to help you find the best refinance mortgage available without overcharging you in the process. A reasonable fee to pay for your loan origination is a flat one percent; you just need to find the right person to arrange your loan.

Banks Will Not Give You Par Mortgage Rates

Many homeowners think they can avoid markup and mortgage junk fees by refinancing with their bank or credit union. The problem is while its true banks don’t have the same markup as your mortgage broker on their loans they still markup interest rates to make a premium profit when your loan is sold. Also, due to a loophole in the Real Estate Settlement Procedures Act your bank isn’t required to tell you that they’ve marked up your rate or disclose their profit margin on your loan. Banks simply don’t offer their customers par mortgage rates…if you want best mortgage refinance possible you’ll have to use a mortgage broker to arrange your loan.

How to get the Best Refinance Mortgage

You can refinance your home loan by paying a flat one percent origination fee without junk fees or a mortgage that includes Yield Spread Premium; you just need to find the right mortgage broker for the job. Don’t get me wrong, not all mortgage brokers are dirty and rip off their customers; however, they have earned the reputation they deserve which is why you need to take steps to keep your broker honest when mortgage refinancing.

How to Keep Your Mortgage Broker Honest

You can keep your mortgage broker honest by reviewing key pieces of documentation before signing your loan contract. Don’t worry about making a mistake during the process; your three day recission rights allow you to back out of the deal up to three business days after signing before your mortgage loan is funded. Here are the documents you need to focus your attention on to get the best refinance mortgage possible.

First, make sure your loan does not create Yield Spread Premium for the mortgage broker. Tell your broker that you will pay a reasonable amount for the origination fee but will not accept a mortgage that creates Yield Spread Premium. Once you find a mortgage broker willing to arrange your loan with these terms you will need to pay close attention to the following two loan documents. First, once you lock in your mortgage rate you will need written confirmation of your lock from the lender. The lender’s written rate lock confirmation will clearly disclose any Yield Spread Premium being paid to your mortgage broker.

Make sure the written rate lock confirmation provided by your mortgage broker comes from the lender and is not something your mortgage broker typed up for you. Many brokers do this to conceal the Yield Spread Premium they are taking on your mortgage. Also, never accept verbal confirmation of your mortgage rate lock. If you don’t have your lock in writing from the lender then you haven’t locked. Period.

The second document you need to focus your attention on to get the best refinance mortgage is the HUD-1 settlement statement. This document will disclose all fees, including mortgage junk fees and Yield Spread Premium. Outlining all of the fees and markup you need to look out for is beyond the scope of this article and is covered in detail in my Underground Mortgage Videos.

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If you are in the process of refinancing your home mortgage loan you might be wondering what the best way for comparing lender rates is.

Many homeowners approach refinancing the same way they approach purchasing a kitchen appliance; if you shop for a mortgage loan in this manner you can expect to overpay thousands of dollars every year that you keep your home loan.

Here are several tips to help you comparing lender rates without overpaying when refinancing your home mortgage loan.

Comparing Lender Rates Online

The Internet is an excellent resource for comparing mortgage rate quotes; however, you should know that nearly all of the quotes you receive from mortgage companies and brokers include commission based markup. While there’s nothing wrong with the person tasked with arranging your home loan, this is what the mortgage origination fee you pay is for. It makes more sense to pay a reasonable loan origination fee once at closing rather than to pay this fee over and over again every year in the form of a marked up mortgage rate. The problem is that most homeowners don’t understand that their mortgage rate has been marked up and pay this on top of the origination fee.

How Much Should You Pay for Loan Origination?

A reasonable loan origination fee is one percent of your loan amount. You don’t want to accept any rate quote that includes commission based markup for reasons we’ll discuss in a moment. What is this commission based markup and how does it drive your mortgage payment up unnecessarily? Once you understand how this commission based markup of your mortgage rate works you’ll be on the right track to finding a broker to arrange your loan without this markup.

Mortgage lenders pay a fee known as Yield Spread Premium when your mortgage company or broker locks and closes your home loan with a higher than necessary interest rate. Lenders pay a fee because mortgages with higher than market interest rates bring them a premium when sold to investors on the secondary mortgage market. In addition to the loan origination fee that the mortgage broker is probably overcharging, the mortgage lender pays this person one percent of your loan amount for every .25% they markup your interest rate. Not only does this result in your not getting the mortgage rate you deserve it results in an unnecessarily high mortgage payment.

Here’s an example to illustrate how Yield Spread Premium drives up your mortgage payment unnecessarily. Suppose for example you are refinancing your home for $315,000 with a mortgage rate quote of 6.5%. What you don’t know is that you were actually approved for a mortgage rate of 6.0% and the broker marked it up to 6.5%. Using a Mortgage Interest Calculator we can calculate your payment on a 30 year, fixed rate loan with both interest rates. Your monthly payment at 6.5% would be $1,991… If you had the mortgage rate you deserve at 6.05 your payment would only be $1888. That’s a difference of $1,236 you’re throwing away every year!

How to get the Mortgage Rates You Deserve

You can get the Refinance Interest Rate that you deserve by learning how to recognize and negotiate Yield Spread Premium on your loan. Negotiating refinance loan rates that do not include Yield Spread Premium is not as difficult as it sounds; you simply need to find the right person, (mortgage broker) to arrange your next home loan. Mortgage brokers have access to wholesale rates so your best bet for getting a home loan that does not include Yield Spread Premium is to find the right one for the job.

Mortgage Brokers, Not Bank Refinance

There’s a problem with bank mortgage loans that you might not be aware of. Banks are exempt from the Real Estate Settlement Procedures Act. This disclosure legislation used to cover both banks and mortgage brokers, requiring that they both disclose their markup and profit margins on your home loan. The Banking Lobby spent millions of dollars lobbying Congress to have the law changed and in 1999 banks were excluded from this important disclosure legislation. Aside from the fact that banks are not required to play by the same rules as other lenders you’ll never know how much the bank marked up your refinance interest rate because the bank is not legally obligated to tell you. If you want the best mortgage deals when refinancing you’ll simply need to find the right mortgage broker to arrange your home loan for you.

Who is the right broker to find you the best mortgage deals? The right mortgage broker for the job isn’t going to be one working for a large firm with an expensive advertising budget. These brokerage firms most likely have too much overhead to negotiate the kind of deal I’ve described here. If you want the best mortgage deals available you’ll need to find a self-employed mortgage broker, working from home if you can, that is willing to negotiate origination fees and Yield Spread Premium.

Start by telling prospective mortgage brokers that you are willing to pay a one percent origination fee and will not accept any house refinance that includes Yield Spread Premium. You can keep your mortgage broker honest by asking to see the written rate lock confirmation provided by the mortgage lender as this document will clearly disclose Yield Spread Premium on your loan. You can also find the fee paid by the lender on your HUD-1 Settlement Statement in section 800.

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Can mortgage rates really be forecast?

If you’re in the process of taking out a new mortgage loan either to purchase your home or refinance an existing loan can you predict which way interest rates will go prior to locking? People ask me all the time which way I think mortgage rates are going; however, I try to avoid making predictions because you simply cannot forecast mortgage rates.

Anyone who tells you otherwise is selling something. There are however, steps you can take to ensure the mortgage rate you lock is the lowest possible. Here are several mortgage rate tips that will literally save you thousands of dollars on your next home loan.

Mortgage Rate Forecast Snake Oil

No one can predict mortgage interest rates. If your mortgage broker tells you that they can predict when rates will go up or down they are simply guessing. Forecasting mortgage rates is like forecasting what the stock market will do. Much like other financial markets mortgage rates move on economic news and data. There is typically an inverse relationship with mortgage rates and economic news that you may have noticed during the last recession; bad economic news and bleak outlook means lower mortgage rates and vice versa. Of course this isn’t always true but it is a good rule of thumb for understanding how mortgage rates move with the economy.

It is a waste of your time and effort trying to time the market and you should be suspicious of anyone claiming to have a mortgage rate forecast. Instead of trying to time mortgage rates your best strategy for taking out a mortgage is to lock in the lowest mortgage rate possible. The question now becomes how you find the lowest mortgage rates.

Finding the lowest mortgage rate is not as simple as you think. Most homeowners approach this by collecting mortgage quotes from several lenders and choosing one with the lowest interest rate and fees. The problem with this approach is that the mortgage rates you get when comparison shopping have all been marked up to create commission for the person or bank offering you that quote. Home mortgage loans are retail products much like everything else you buy today; if you want the best possible deal for your next home loan you’ll need to go wholesale.

What Are Wholesale Mortgage Rates?

Wholesale Mortgage Rates are also known as Par Mortgage Rates and are simply interest rates that you don’t have to pay anything to get and do not create an extra commission for the person or company arranging your home loan. When you have to pay to qualify for specific mortgage rate this fee is known as a “discount point.” You should also know that banks do not offer par rates to their customers; while their mortgage rates are typically not marked up to create a commission for the person arranging the loan they will be marked up to create a commission for the bank when your loan is sold on the secondary market. Banks are also exempt from disclosure laws in the United States and are not required to disclose any of their markup or profit margin on your loan thanks to a loophole in the Real Estate Settlement Procedures Act.

How to Get the Lowest Mortgage Rate

Getting a mortgage rate forecast won’t help you when taking out a new home loan so how can you get the lowest possible mortgage rates? You don’t have to be a financial guru to get a par mortgage rate for yourself; you simply need to understand how mortgage quotes work to avoid overpaying the person or company arranging your loan. I’m not saying this person doesn’t deserve to be compensated for their work on your loan; on the contrary, that is what the loan origination fee is for. The problem is that the many mortgage brokers help themselves to this “extra” commission known as Yield Spread Premium from the lender at your expense.

Why would the lender pay your mortgage broker a commission for your home loan? What’s in it for the mortgage lender? You’re already paying the loan origination fee to the Mortgage Company or broker, why would the mortgage lender pay extra, especially in this economy? Mortgage lenders reward brokers that lock and close home loans with higher than necessary interest rates with a fee known as Yield Spread Premium. Lenders do this because mortgage loans with higher than “market” rates bring them the most profit when your loan is sold to investors. Avoid this markup and you’ll get a par mortgage rate saving yourself thousands of dollars every year that you keep the loan.

How do you get a par mortgage rate? You’ll first need to find the right mortgage broker to arrange your loan. You already know that banks don’t offer par rates and most mortgage brokers are unwilling to negotiate this fee. In fact many brokers become defensive and angry when you question them about Yield Spread Premium. If your mortgage broker does this it is a good indication that you need to find someone else for the job. You’ll also need to find a mortgage broker willing to work for a flat origination fee; one percent is a reasonable amount to pay for arranging your home loan without marking up your rate for Yield Spread Premium. Instead of shopping for the right home loan you’re actually shopping for the right mortgage broker to arrange your loan.

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If you’ve been sitting on the fence about refinancing your home mortgage and are discouraged by reports of rising interest rates, it’s not too late to lower your monthly payment and put some cash in your pocket in the process.

There are several refinancing pitfalls you need to be aware of that drive up your mortgage rate and monthly payment; however, once you find the right person to arrange your new home loan you’ll be able to refinance without paying too much.

Here are several tips to help you get the lowest possible mortgage rate and monthly payment when refinancing your home loan.

Understanding Mortgage Rates

Notice that I said “find the right person to arrange your home loan.” You’re not going to get the best possible deal refinancing your home with a bank or one of the so called “Direct Lenders” you see advertising home loans. The reason for this is that almost every mortgage quote you’ll receive when refinancing has markup built into it to create a commission for the person arranging it, or a premium when your loan is sold. This markup of your mortgage rate is rarely talked about and cryptically disclosed only part of the time. What is this mortgage markup I’m talking about?

There are two basic ways of refinancing your home mortgage loan. The first is by contacting your bank or credit union. Banks are direct lenders and cut out the middleman when refinancing right? Yes…somewhat; however, you’ll still face the same markup of your mortgage rate by a different name, driving up your monthly payment unnecessarily. Of course your banker will never admit this thanks to a loophole in the Real Estate Settlement Procedures Act… banks are exempt from disclosing any of their markup or profit margin on your loan. Your banker will probably show you the bank’s mortgage rate sheets for the day, swearing they’re not marked up; however, unless you know how to recognize this markup you’ll never know how low your mortgage rate could have been.

The second way people refinance their mortgages is with a mortgage broker. I know what you’re thinking; mortgage brokers have earned themselves a reputation for being sleaze buckets lower than a used car salesman… and in many cases rightly so. Mortgage brokers do have one redeeming quality in that they have access to wholesale mortgage rates. Most mortgage brokers aren’t going to let you have a wholesale rate, unless you know how to get it. That is the purpose of this article and the mortgage videos on this website.

How to Get The Lowest Possible Mortgage Rate

It’s true that mortgage rates are rising; however, would you know to recognize mortgage rate markup if you saw it? Don’t worry if you wouldn’t, most homeowners don’t know what the markup is let alone know how to recognize and avoid it. So what is this nefarious mortgage rate markup that drives up your monthly payment for no good reason? Before we discuss that I need to give you the framework for your ideal mortgage rate. What is ideal? In the industry the ideal rate is called a “par mortgage rate.” Simply put, a par mortgage rate is one that doesn’t cost you anything to get out of pocket in the form of discount points and does not create an “extra” commission for the person arranging your loan.

Remember that discount points are a fee you pay in exchange for a lower interest rate and that one point is one percent of your loan amount. On a $200,000 mortgage loan one discount point would be $2,000 due at closing. Mortgage rates are low enough that you’ll want to avoid paying discount points whenever possible. Get yourself a par mortgage rate and you won’t have to pay any discount points at all. The other type of points you’ll encounter are origination points. This is the mortgage broker’s fee for arranging your home loan. One percent is reasonable, it is not necessary to pay more.

What about this extra commission? Mortgage rates that have been marked up by the person arranging the loan create a commission or a “kickback” from the lender. This kickback is called Yield Spread Premium and costs the average homeowner in excess of $1,000 per year. Most people have a mortgage that includes this form of markup; in fact, the Secretary of Housing and Urban Development recently said homeowners overpay nearly sixteen billion dollars every year because of it. That includes your smug neighbor down the street…that guy’s overpaying too. Just think… you’re going to have a better mortgage loan that that guy once I’m finished with you.

Mortgage Yield Spread Premium

This markup of your mortgage interest rate for a commission known as Yield Spread Premium results when your mortgage broker locks and closes your home loan with a higher than necessary mortgage rate. There are several documents you receive in the process of refinancing your home that disclose Yield Spread Premium, if you know what you’re looking for. Your first opportunity to spot this unnecessary markup of your loan is when you lock your mortgage rate.

We all know locking is supposed to “guarantee” your mortgage rate for a period of time so that you can close on the loan. Some dishonest mortgage brokers charge a fee for locking your mortgage rate, but you should know there isn’t a single mortgage lender in the country that charges this for locking and it is pure garbage. Once you’ve you locked in your mortgage rate you should receive written confirmation of the lock from the mortgage lender. Never accept a verbal mortgage rate lock or any written confirmation that comes from the broker or mortgage company. If you don’t have written confirmation from the lender you either haven’t locked or the broker is trying to hide their markup of your mortgage rate. Any Yield Spread Premium on your mortgage loan will be clearly disclosed on your lender’s rate lock confirmation.

Your second opportunity to spot Yield Spread Premium on your mortgage loan when refinancing is just prior to closing when you receive the HUD-1 Settlement Statement. You’ll find Yield Spread Premium disclosed in section 800 of this document; although the lender might have a cryptic name for the fee. Often the markup is disclosed as “Paid Outside of Closing” or POC charges.

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If you’re asking yourself the question “Should I Refinance” there are a number of things you’ll want to consider before taking out a new mortgage loan.

There is a lot of bad advice out there when it comes to this question and ultimately the answer for you is going to depend on your individual situation.

Here are several tips to help you answer the question “Should I Refinance” for yourself and avoid paying too much when you do.

Forget the Two Percent Rule

Whoever came up with the two percent rule of mortgage refinancing deserves to be tied to an anthill and doused with honey. Really. The two percent rule is a wives tale that makes no sense whatsoever if you approach the question “Should I Refinance” logically. First of all, the two percent rule of mortgage refinancing states you should not refinance your mortgage unless your new mortgage rate is two percent lower than your old mortgage rate.

There are many reasons for refinancing your home loan. Some people refinance to get a lower mortgage rate; however, others refinance to consolidate first and second mortgage loans or borrow cash from the equity in their homes. No matter what your reason for refinancing if you are comfortable with the consequences of taking out a new mortgage then mortgage refinancing is probably the right choice for you. So what exactly do I mean by the consequences of mortgage refinancing?

Should I Refinance… How Long To Recoup My Expenses?

If the inventors of the two percent rule had actually thought about what they were doing they would have said it makes more sense to base your decision to refinance on how long it will take you to recoup your expenses from refinancing, if at all. There are some situations where you will never recoup your expenses from taking out a new mortgage loan but if you can justify the expense and are comfortable with the consequences, mortgage refinancing still makes sense. If you are refinancing to get a lower mortgage rate and payment amount you’ll want to consider how long it will take you to recoup your origination fees and closing costs with your new lower monthly payment.

Calculating how long it will take to recoup your expenses from refinancing is easy: simply divide your total expenses by the amount you’re saving each month. This figure will give you the number of months it will take you to make up your expenses from refinancing. If you’re happy with the lower payment and the amount of time it’s going to take you to pay back your closing costs then the answer to the question “Should I Refinance” is yes. How ridiculous does the two percent rule of mortgage refinancing seem now?

How to Pay Less for Your Next Mortgage

Most people overpay for their home loans because they pay too much for the mortgage broker. Your mortgage broker deserves to be paid for their work; however, many brokers take advantage of their customers with hidden markup and junk fees. And you thought answering the question “should I refinance” was hard enough right? Fortunately you don’t have to be a financial guru to avoid being taken advantage of when refinancing your home loan. The information and mortgage videos found on this website saves the average homeowner $1,000 per year from this markup and mortgage junk fees.

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Are you in the process of refinancing your home loan and don’t want to pay too much at closing?

There is mortgage rate markup and a number of junk fees lurking in your Good Faith Estimate and Settlement Statement that you need to avoid if you don’t want to pay too much.

Here are several tips to help you avoid overpaying at your mortgage refinancing closing.

Mortgage Refinancing Closing Pitfalls

Refinancing can be a frustrating process. You’re presented with a Good Faith Estimate by your cantankerous mortgage broker, someone who you’re not sure you can trust and a variety of cryptic fees that your broker assures you are “normal.” The fact of the matter is that if you accept your mortgage broker’s word on these fees you will surely overpay for your next home loan. What can you do to ensure you don’t pay too much at closing when mortgage refinancing? Read on… the mortgage tips found on this site save the average homeowner $1,000 per year in junk fees and mortgage markup.

Avoid Refinancing Pitfalls Including Junk Fees

Most of the junk fees you’ll encounter at mortgage refinancing closing are a result of your mortgage broker padding their commission at your expense. Simply put there are a handful of fees you’re likely to encounter that serve no purpose whatsoever and go straight into your mortgage broker’s pocket. What fees should you keep an eye peeled for? Mortgage rate lock fees, mortgage broker courier fees, and loan processing fees are pure garbage and not necessary for your loan. Additionally, if your mortgage broker is charging you a fee to lock in your mortgage rate this is a sure sign that you’re dealing with a dishonest broker. There isn’t a single mortgage lender out there that charges a fee for locking in your mortgage rate.

Your Mortgage Broker’s Commission

What about your mortgage broker’s commission? Surely your broker deserves to be paid for their work? No one’s saying that your mortgage broker doesn’t deserve to be paid; however, many brokers are too liberal when helping themselves to your money. Your mortgage broker’s fee for arranging your loan is the loan origination fee that you find on your Good Faith Estimate and Settlement Statement. This fee is more than ample compensation for your mortgage broker’s work and a reasonable amount to pay for loan origination is one percent of your home loan amount. Many brokers try and charge more than one percent; it’s not common to find estimates as high as two or three percent. Never agree to pay this much for loan origination… there are plenty of honest mortgage brokers out there willing to work for one percent.

There are also a handful of mortgage brokers out there that do not charge loan origination fees and are happy to brag about it. If the broker isn’t charging origination fees on your loan how are they paid? Ask the mortgage broker and they will spin you a tale that the lender is paying the fee which is saving you thousands of dollars on the refi. While it is true that the lender is paying the mortgage broker a fee they’re not paying this fee to do you a favor. Mortgage lenders reward brokers that lock and close mortgage loans with higher than necessary mortgage rates. In exchange for duping you with too high a mortgage rate the lender pays your mortgage broker’s commission. You get stuck with a higher than necessary mortgage rate and payment because the lender is paying your origination fee. Is it worth it to save one percent up front to pay this amount each and every year you keep the mortgage loan? This commission based markup of your mortgage rate raises the payment of an average home loan by $100 or more per month. Can you afford to throw away $1200 per year, every year for your mortgage broker’s commission?

You Can Pay Less For Your Mortgage Loan

You don’t have to be a financial guru to get the deal that I’m describing here when refinancing your home loan. Do your homework by investing one hour of your time to watch the mortgage videos on this site and you’ll have all the tools and knowledge you need to find the right person to arrange your next home loan. Notice that I said find the right mortgage broker rather than find the right mortgage loan. A common mistake many homeowners make is to shop for a mortgage loan in the same manner as a household appliance. This approach results in paying the hidden mortgage broker commission every time. Did you know that according to the Secretary of Housing and Urban development the hidden broker fee we’ve discussed is responsible for homeowners in the United States overpaying sixteen billion dollars per year? Don’t be a part of this statistic; find the right broker and you’ll save thousands of dollars per year on your next home loan.

How to Find the Right Mortgage Broker When Refinancing

Find the right mortgage broker to arrange your home loan and you won’t have to worry about mortgage refinancing closing costs. Who is the right mortgage broker for the job? Look for small time, self-employed mortgage brokers that do not employ a sales staff or work out of expensive office spaces. Mortgage brokers with expensive overhead will be unwilling to negotiate the deal you are looking for. Self-employed mortgage brokers do not have this overhead and will typically work for a one percent origination fee. Explain to the mortgage brokers you contact that you are willing to pay a one percent mortgage origination fee but will not accept any loan that includes markup of the interest rate for a commission. This fee for marking up your mortgage rate is called Yield Spread Premium. If you are upfront with the mortgage brokers you contact you will have no trouble finding one that will agree to your terms.

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If you are in the process of refinancing your home mortgage loan there are a number of pitfalls that can result in overpaying thousands of dollars per year.

These pitfalls range from the markup of your mortgage rate to junk fees that raise your monthly payment. Avoid these refinance traps and you can save thousands of dollars every year that you keep your mortgage. Here’s what you need to know.

Avoid These Refinance Traps

What are mortgage refinance junk fees? Anything that serves no purpose other than boosting the mortgage broker’s commission at your expense is a junk fee. Mortgage brokers receive compensation for their work from a number of sources and if you’re not careful these fees can result in overpaying thousands of dollars every year that you keep the loan.

The first mortgage broker fee you’re likely to encounter when refinancing your home mortgage is the loan origination fee. This is a fee paid to the mortgage broker specifically for their part in arranging your loan. A reasonable amount to pay the mortgage broker for loan origination is one percent of your loan amount; however, many brokers will try and pad this fee. This origination fee, while frequently overcharged, is fairly straightforward and will appear on your Good Faith Estimate and HUD-1 statement.

Don’t Put Much Faith in Your Good Faith Estimate

The law requires mortgage brokers to provide you a copy of the Good Faith Estimate as part of their disclosures; however, there are no standards as to what fees have to be disclosed to you and many are conveniently left off to make expensive loan offers seem more attractive. Your Good Faith Estimate is little more than a marketing tool used to lure homeowners into overpriced home loans… don’t trust this mortgage document.

If you can’t rely on the Good Faith Estimate when shopping for a mortgage loan what can you trust? There are two reliable documents you will receive when refinancing your home loan. The first is the original written rate lock confirmation from the mortgage lender and the second is the HUD-1 Settlement Statement; however, neither one of these documents help you shop for a mortgage loan. Make sure that the rate lock confirmation you receive comes from the mortgage lender and not the mortgage broker and never accept verbal confirmation of your rate lock. As for the written confirmation, make sure it comes from the mortgage lender and is not typed up on your broker’s letterhead. Many mortgage brokers pass off bogus rate lock confirmation in an attempt to hide their markup of your mortgage interest rate.

How to Shop for a Mortgage Loan

A common refinance trap to avoid is shopping for a mortgage loan like you would a kitchen appliance. While it’s true that mortgage loans are retail products and are subject to the same type of markup that results in overpaying, you don’t want to try making apples to apples comparisons of your mortgage loan offers. There is simply no reliable way to screen mortgage loans when refinancing due to these limitations of your disclosure documents.

The best way to shop for a new mortgage when refinancing is not to compare loan offers, but shop for the right mortgage broker instead. When you find the right person to arrange your next mortgage you’ll avoid all of the refinance traps that I’ve mentioned here today. How can you find the right mortgage broker to arrange your home loan? It’s not as hard as you might think; however, there is one other junk fee we need to discuss known as Yield Spread Premium.

Unnecessary Mortgage Broker Fees

Ask most mortgage brokers about Yield Spread Premium and they get defensive, even angry. Many think that as a mortgage broker Yield Spread Premium is their birthright. The simple fact of the matter is that charging an origination fee and Yield Spread Premium is advantageous and wrong. What is Yield Spread Premium? Simply put, it is the number one refinance trap to avoid and according to the HUD Secretary will cost homeowners in the United States sixteen billion dollars this year.

Yield Spread Premium is a Trap

Not only is Yield Spread Premium a trap that drives up your mortgage payment unnecessarily, like the jelly of the month club it’s keeps doing it all year long…every year you keep the mortgage loan. Yield Spread Premium is a fee paid to your mortgage broker for locking and closing your home loan with a higher than necessary mortgage rate. Mortgage lenders reward your mortgage brokers for overcharging you with this commission. Because you’re closing with a higher mortgage rate than you deserve your monthly payment will also be higher than it needs to be, meaning you’re overpaying as long as you keep this mortgage loan.

Yield Spread Premium works as an incentive from the lender for overcharging you. For every .25% you overpay on your mortgage the broker receives a bonus of 1.0% of your loan amount in addition to the origination fee you’re already paying. The good news is that like any other refinance trap, Yield Spread Premium and other junk fees can be avoided.

You can learn more about this article Avoid These Refinance Traps, including which mortgage fees are junk like Yield Spread Premium by registering for my Underground Mortgage Videos. Register today and you’ll get immediate online access to all the videos without downloading anything to your personal computer.

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If you’ve been thinking about refinancing your home mortgage loan but don’t think you’ll be able to take advantage of today’s low rates because of your credit, you might be surprised to learn how accessible low mortgage rates are.

While your credit score plays a factor in qualifying for a mortgage loan, getting the lowest mortgage rate and payment depends not on your credit history but how much about mortgage loans you know.

It’s true… learn the ropes and you’ll find that you qualify for a better mortgage rate than that snobbish neighbor on your block with their perfect credit rating. Here’s what you need to know in order to refinance your mortgage getting the lowest possible payment with less than ideal credit.

Just How Bad is Bad Credit?

There are limitations of course to how bad your credit can be in order to qualify for a traditional mortgage loan; assuming your credit score is not a barrier to loan approval your actual credit score is a non-issue. It doesn’t matter if your credit score is 650 or 750, once you’re approved your credit score has nothing to do with the mortgage rate you receive. What should you do if you cannot qualify for a traditional mortgage loan because of your credit? There are lenders that specialize in this type of home loan; even if you are unable to qualify for a traditional mortgage loan the strategies taught on this website can still save you thousands of dollars. What you need to know is that responsibility for setting your mortgage rate does not lie with the lender. So, if the mortgage lender doesn’t set your interest rate upon loan approval, who does?

Mortgage Interest Rates 101

It might surprise you to learn that the person responsible for determining your mortgage interest rate and ultimately whether or not you get a good deal or overpay is none other than your old friend the mortgage broker. You see, mortgage brokers work from daily lender rate sheets. These mortgage rate sheets quote interest rates for the same loans, with and without points. Keep in mind that a point is a fee you’ll pay to qualify for a specific mortgage rate and not all mortgage rates require paying points. In fact, some mortgage rate quotes actually create points for the broker, which is something you’ll want to avoid when refinancing. Remember that one point is 1.0% of your loan amount and the sweet spot that you’re looking for with your new mortgage is an interest rate that does not require cash out of your pocket or creates an “extra” commission for the person arranging your home loan.

The mortgage rate you’ll receive when refinancing your home loan depends on how well you can negotiate when shopping for the right person to arrange the mortgage. Negotiation not your thing? Don’t worry… it’s a lot easier than you think as long as you’re upfront with the mortgage brokers you contact. I’ve put together a very simple screening process you’ll learn about shortly to weed out mortgage brokers that take lender kickbacks and charge you junk fees.

If you take one thing away from this article in needs to be that the mortgage rate you qualify for has little to do with your credit score and is determined by the person you choose to arrange your home loan…

Because the person you choose to arrange your mortgage is paid by commission you can bet the home loan that gets them the biggest commission is not going to be the right home loan for your situation. So how does this commission I’m talking about affect your mortgage rate? Remember that I told you that lender rate sheets quote mortgage rates that either require or create points? The sweet spot in the middle is the mortgage rate that neither costs nor creates points for the broker. When you pay points in exchange for a lower mortgage rate the fee you’re paying is called a “discount point.” Conversely, when you unknowingly accept a higher than necessary mortgage rate when refinancing, points are created for the broker in the form of an unnecessary commission known as Yield Spread Premium.

Notice that I said “higher than necessary” mortgage rate creating an “unnecessary” commission for the broker. This isn’t to say that the mortgage broker should not be paid for their work; on the contrary, this is what the loan origination fee is for. The problem is that many mortgage brokers feel they are entitled not only to your origination fee, but also to Yield Spread Premium on the loan driving up your mortgage payment unnecessarily. (By the way you shouldn’t pay more than one percent for the loan origination fee.)

Shouldn’t You Just Avoid Refinancing With a Mortgage Broker?

At this point you might be saying to yourself “I already knew that mortgage brokers are shady… I’ll just avoid all this crap and refinance with my bank.” It makes sense right? Banks are direct lenders… refinance with a direct lender and you not only cut out the middleman but their commission also. The problem is that not only does your bank and every other “direct lender” under the sun take the same markup of your mortgage rate but thanks to a convenient loophole in disclosure laws your bank is not required to disclose their markup or profit margin on your loan. Banks simply do not give their customers par mortgage rates… ever. You cannot avoid working with a mortgage broker if you want the lowest possible rate and payment, bad credit or not.

It is possible to refinance your home with a par mortgage rate without a stellar credit rating and you don’t have to be a financial guru to pull it off. You can refinance your home without paying points or Yield Spread Premium on the loan, get the lowest payment and look like a hero to your family. All you need to do is find the right mortgage broker for the job.

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Mortgage Brokers have earned themselves quite a reputation for being used car salesmen bent on padding their commissions at your expense.

Should you avoid using a mortgage broker all together and refinance your home mortgage online or with your bank or credit union? Despite the negative stigma, mortgage brokers have access to the best interest rates that will get you the lowest monthly payment.

Mortgage brokers have a number of tricks up their sleeves that you need to be aware of to avoid paying too much; here’s what you need to know to make sure you get a good deal when refinancing your home loan.

Mortgage Broker Tricks to Avoid

Used car sales people earn a commission based on how much you paid, that is overpaid for your car. Your mortgage broker earns a commission the same way. The more you overpay for your home loan, the larger your broker’s commission. The good news is that there are honest mortgage brokers out there willing to work for a reasonable fee; you just have to find the right person to arrange your home loan.

What about banks? Sure, it’s very easy to refinance your home mortgage with a bank or credit union and you might even think you’re getting a good deal. The problem is that your bank is exempt from disclosure laws in the United States known as the Real Estate Settlement Procedures Act. Thanks to their lobby in Washington, your bank is not required to disclose what their profit margin or markup is on your home loan. You’ll never get the same deal refinancing with your bank or credit union that you could get from an honest mortgage broker.

Finding an Honest Mortgage Broker

Finding the right person to arrange your next mortgage isn’t as hard as you might think. You don’t have to wade through countless Good Faith Estimates looking for the best deal; you just need to find the right person to arrange your loan. Who is the right mortgage broker to arrange your next home loan? It’s probably not going to be your brother-in-law’s cousin. You’re also not going to find the right mortgage broker at a large firm, working out of a posh office with an expensive sales staff. The mortgage broker with a full page ad in the yellow pages and a company hummer splattered with their logo is probably going to be unable or unwilling to negotiate the kind of deal you’re looking for with your next mortgage loan.

So what kind of deal are you looking for when refinancing your mortgage? You want the lowest possible mortgage rate that has not been marked up to create an “extra commission” for the broker. This isn’t to say that your mortgage broker shouldn’t get paid for their work; on the contrary, that’s what the origination fee is for. You will find a loan origination fee listed on your Good Faith Estimate and one percent of the loan amount is a perfectly reasonable fee to pay for your mortgage broker’s work. Some mortgage brokers will tell you that they’re not charging you a loan origination fee, that the lender is paying the mortgage broker fee for you. Why on earth would you want to pay a loan origination fee when the mortgage lender’s willing to pay it for you?

Mortgage Lender Paid Fees

Consider for a moment why the lender would pay the mortgage broker fee for you? What’s in it for them? Your mortgage broker will tell you not to worry about this fee because it’s not coming out of your pocket; however, this lender paid fee is the reason most homeowners overpay for their home loans. Remember that the more you overpay for your home loan, the higher your mortgage broker’s commission. This is because lenders reward mortgage brokers that close home loans with higher than necessary mortgage rates with this “extra” commission. The lender does this because the higher your mortgage rate is the greater their profit will be when they sell your loan to investors on the secondary market.

In a nutshell, you’ve just learned the mortgage industry’s dirty little secret. Why would you accept a loan with lender paid fees in exchange for a higher mortgage rate that drives up your payment amount the entire time you keep the loan?

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Are you shopping for a new home loan and want to know the best way to compare mortgage refinance rates?

It might surprise you to know that the Good Faith Estimates you receive when shopping for a new mortgage are little more than marketing tools used to lure homeowners into high priced loans. How can you best compare mortgage refinance rates while avoiding costly junk fees?

Here are tips to help you avoid paying too much when refinancing your home mortgage loan.

How Not to Compare Mortgage Refinance Rates

Most homeowners rely on two things when shopping for a new home loan: the loan’s Annual Percentage Rate and Good Faith Estimate. I’ve mentioned that the Good Faith Estimate is unreliable when used as a tool to compare mortgage refinance rates; this is due to a shortcoming in disclosure laws that require mortgage lenders to provide you that Good Faith Estimate, but have no standards for what should be included. Your mortgage lender is free to disclose whatever they like on the Good Faith Estimate because it is simply an “estimate give in good faith.”

What about the mortgage Annual Percentage Rate or APR? This figure is supposed to give you the total cost of taking out a mortgage expressed as a yearly percentage of your loan amount. Again, much like the Good Faith Estimate your lender is required to publish Annual Percentage Rate for all of their home loan offers; however, there are no standards for what fees they are required to include in their calculations. Annual Percentage Rate is just another tool in your mortgage lender’s marketing arsenal.

How to Best Compare Mortgage Refinance Rates

There is a better way to shop for a home loan when refinancing your mortgage. Instead of shopping for a mortgage loan like you’re buying a bottle of ketchup, focus your energy on finding the right person to arrange your next home loan. You don’t need to bog yourself down comparing mortgage rates and fees, you just need to focus on two key elements of the mortgage broker’s compensation and the rest will fall into place.

People might tell you that mortgage brokers are crooks and you should avoid them all together when refinancing your home. Why not just refinance with your bank and not have to worry about broker fees all together? While it’s true that bank mortgage loans are convenient, I mean what could be easier than automatically transferring your mortgage payment from your checking account every month? There is one glaring problem with bank originated mortgage loans that you should know about.

The Real Estimate Settlement Procedures Act

Before we get into the best way to compare mortgage refinance rates there are a few things you need to know about disclosure laws in the United States that protect homeowners from predatory lending practices. The laws I’m referring to are known as the Real Estate Settlement Procedures Act (RESPA) and require mortgage brokers to disclose their markup and profit on your home loan. Sounds good right? The problem is that your bank and credit union are exempt from RESPA thanks to the Banking Lobby. These lobbyists spent millions of dollars getting Congress to change the laws that protect you from abusive mortgage loans so that your bank and credit union don’t have to play by the rules. That is the reason you should never take out a mortgage from your bank or credit union… you’ll never get anything close to a par mortgage rate.

What Are Par Mortgage Rates?

I talk about par mortgage rates on this website a lot because this should be your goal when you compare mortgage refinance rates. Simply put, a “par mortgage rate” is one that does not cost you any money to get and a mortgage rate that does not create an extra commission for the person arranging your home loan. When I say this is a mortgage rate that doesn’t cost you anything that means you don’t have to pay points up front to qualify for that rate. Remember a “discount point” is one percent of your loan amount that you have to pay at closing to get a certain mortgage rate. As for this “extra commission” I am of course talking about Yield Spread Premium. Don’t sweat it if you don’t know what Yield Spread Premium is, I’ll cover this in great detail later. In a nutshell it’s an extra commission paid to your mortgage broker for locking and closing your home loan with a higher than necessary mortgage rate. Think of it as a bonus paid to the mortgage broker for overcharging you.

This isn’t to say that your mortgage broker shouldn’t be paid for the work they do arranging your home loan. On the contrary, this is what the mortgage origination fee you’ll find on your Good Faith Estimate covers. Your mortgage broker deserves to be paid for the work they do like anyone else and a reasonable fee to pay for their services is one percent of your loan amount. What your mortgage broker should not be doing is padding their commission at your expense and this is exactly what Yield Spread Premium does to your home loan.

How to Find the Right Mortgage Broker

So how do you find the right person to arrange your home loan when you compare mortgage refinance rates? Does the right mortgage broker work for a large firm with an expensive sales staff and advertising budget? What about those mortgage brokers you see driving company hummers around town with their company logos splashed all over them? I can tell you from experience that because of their overhead, these mortgage brokers will be unable or unwilling to negotiate the kind of deal when refinancing that will give you a par mortgage rate, just like your bank.

Who is the right mortgage broker for the job? Look for a small time, self-employed mortgage broker working from home. These mortgage brokers have little overhead and for the most part will be honest, hard working professionals you can count on to get you a good deal when refinancing. This doesn’t mean you should blindly trust what your mortgage broker is telling you about their loan offers. There are several key points you’ll need to focus on when you compare mortgage refinance rates to make sure you’re not overpaying.

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Are you looking for a mortgage with the lowest possible monthly payment? Do you know which fees drive up your mortgage payment unnecessarily and how to avoid them? There is one hidden fee you should know about that according to the Secretary of Housing and Urban Development will cost homeowners in the United States sixteen billion dollars this year alone. Here are several tips to help you get the lowest possible monthly payment while avoiding unnecessary fees on your next home loan.

What Determines Your Monthly Mortgage Payment?

Assuming that you don’t have a derogatory credit rating there are two main factors that determine your payment amount. The first of course is the mortgage rate you qualify for, and the second is the term length you choose for your home loan. Term length is the amount of time you have to repay the loan and determines your amortization schedule. Amortization is a term that describes the repayment of your mortgage loan over time as well as how much of your monthly payment is applied to finance charges. The most common term length lengths are 15 and 30 years; however, there are 40 year terms available. As a rule of thumb the longer your term length the lower your monthly payment will be. Conversely, choosing a shorter term length will raise your payment amount as more of that payment will go towards repaying the loan, than paying the lender interest.

Fees That Affect Your Mortgage Payment

There is a fee you will find on your Good Faith Estimate known as a “Discount Point.” This is a fee your lender may require you to pay to qualify for a specific mortgage rate. One point is equal to one percent of your mortgage rate due at closing. Mortgage rates are very low in today’s market so it’s best to avoid paying discount points whenever you can as the return on your investment for paying this fee will be very low. As a rule of thumb one discount point should lower your mortgage rate by .25 percent; however, if your credit rating is poor you may be required to pay points just to get approved for the loan.

Hidden Fees That Raise Your Mortgage Payment

There is a hidden fee you will not find on your Good Faith Estimate that drives up your mortgage rate and monthly payment unnecessarily. Most people think that using the Good Faith Estimate is a way to compare mortgage fees when shopping for a home loan; however, while disclosure laws in the United States require lenders to provide you with a Good Faith Estimate, there are no requirements as to which fees need be listed. Most mortgage brokers find it convenient to leave off any fees related to their commission that drive up your mortgage payment.

The fee you won’t find on your Good Faith Estimate is known as “Paid Outside of Closing” or POC fees. This is a commission paid by the lender to the mortgage broker for locking and closing your home loan with a higher than necessary mortgage rate. This fee is also known as Yield Spread Premium, and while you won’t see it on your Good Faith Estimate it will appear in one form or another on your HUD-1 statement. The problem is by the time you get the HUD-1 it’s often too late to do any good for comparison shopping. So how can you recognize Yield Spread Premium earlier in the mortgage process?

How to Recognize Paid Outside of Closing (POC) Fees

The first opportunity you’ll have to spot the POC fees also known as Yield Spread Premium on your loan, assuming that your broker is honest about not taking this fee on your loan, is when you lock in your mortgage rate. The rate lock confirmation from the lender will show you the mortgage rate, any discount points you will be required to pay, as well as any fees paid outside of closing to your mortgage broker. Be careful that the rate lock confirmation you get is in writing and comes directly from the lender, not your mortgage broker. Some dishonest brokers type up a bogus mortgage rate lock confirmation on their company letter head and try and pass it off as the lender’s mortgage rate lock. Also, if you have a “verbal” rate lock with your mortgage broker or a bogus written lock there is no way to be sure that you have actually locked in your mortgage rate. If you’re in this situation walk away and find another mortgage broker to arrange your loan.

Yield Spread Premium Drives up Your Mortgage Payment Unnecessarily

We’ve already discussed how your mortgage broker can receive a hidden commission for marking up your mortgage rate, but how does this drive up your monthly payment? Have a look at the following example to illustrate how this unnecessary markup can cost you thousands of dollars. Note that I’m saying “unnecessary” and “hidden” commission on your loan. Don’t get me wrong… I’m not saying your mortgage broker shouldn’t get paid for their work, that’s what the origination fee you pay is for. As for origination fees, one percent is a perfectly reasonable fee to pay for your mortgage broker’s services that won’t drive up your monthly payment.

Suppose for example you are refinancing your home for $315,000. Your mortgage broker quotes you an interest rate of 6.0% and charges you one percent for loan origination. That one percent origination fee is perfectly reasonable; however, what about your six percent mortgage rate? What your mortgage broker isn’t telling you is that you actually qualified for a 5.25 percent interest rate but the broker marked it up to get a commission from the lender. In this case, your mortgage broker receives one percent of your loan amount for every .25 they’ve overcharged you. Your broker walked away from this transaction with your one percent in their pocket plus three percent from the lender and you get stuck with a monthly payment higher than what it should be.

How much money is going down the drain on this home loan? With the mortgage loan you got at six percent on a thirty-year fixed rate deal your payment will be $1,900 per month. If you had the mortgage payment you deserve at 5.25 percent your payment would only be $1,740 per month! That’s a difference of $160 per month and a whopping $1,920 per year! The good news is that now you know about this hidden fee that drives up your payment and you can avoid it.

You can learn more about getting the lowest mortgage payment when refinancing your home by registering for my Underground Mortgage Videos. Register today and you’ll be on your way to saving thousands of dollars in markup and junk fees on your next home loan without downloading anything to your computer.

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If you’re in the process of refinancing your home mortgage loan you may be concerned about paying junk fees at closing.

It’s true that there are a number of fees you cannot avoid when refinancing your home loan; however, there are also a number of fees from the broker and lender alike that are pure garbage.

Here are several tips to help you avoid overpaying at closing when refinancing your home mortgage loan.

What Are Mortgage Junk Fees?

Simply put a mortgage junk fee is one charged by your lender or mortgage broker that serves no purpose other than boosting their commission or profit margin on your home loan. In order to avoid paying junk fees at closing you’ll first need an accurate assessment of what fees you’re being charged on your new mortgage loan. Nailing down an exact list of mortgage fees isn’t as easy as you might think mainly due to the deceptive practices used by many lenders and mortgage brokers today.

Should You Trust Your Good Faith Estimate?

The short answer is no, absolutely not. The Good Faith Estimate or GFE for short is just what its name implies… an estimate. Lenders are required by law to provide you with a copy of the Good Faith Estimate within 24 hours of receiving your application; however, there is little required beyond that. After all, the Good Faith Estimate is just an estimate of your closing costs and fees given in “Good Faith.” Truth be told, the Good Faith Estimate, like its shifty cousin the Annual Percentage Rate is little more than a marketing tool used to dupe homeowners into high priced mortgage loans. Ouch! (Well…it’s true!)

What About the Annual Percentage Rate?

Should you rely on the Annual Percentage Rate (APR) when comparing loan offers? After all, the APR is required to be disclosed under our current Truth in Lending Laws; however, like the Good Faith Estimate there is no standard for how your lender is required to calculate APR or even what fees they are required to include in whatever calculation de jour they are using for your home loan. Make no mistake… APR is completely worthless when comparing loan offers. Don’t be duped by your mortgage broker or lender into choosing a home loan based on the Annual Percentage Rate… it’s a sure way to overpay for your mortgage.

How Do You Evaluate Mortgage Loan Offers?

If the Good Faith Estimate and Annual Percentage Rate are worthless when it comes to rooting out mortgage junk fees, what should you rely on before closing on a mortgage loan? Most people go about choosing a mortgage like they would a bottle of ketchup in the grocery store. While it’s true that mortgages are retail products, printing out a list of loan offers and comparing them line-by-line to choose the “best” home loan isn’t necessarily going to work. The reason for this is simply that everything you’re offered prior to closing is slanted from a marketing perspective (GFE and APR). You won’t know what your actual charges and fees are going to be until you get your hands on the HUD-1 Settlement Statement which doesn’t help you in the comparison shopping department one bit.

How to Shop for a Mortgage Loan

The best way to refinance your home isn’t to focus on finding the best loan offer or lender like you might think, but to focus your efforts on finding the right person to arrange your new home loan. This might seem counterintuitive to most; however, let me explain my reasoning. With the exception of bank originated mortgage loans which are a whole other ball of wax that you’ll want to avoid for very good reasons that I can get into later, home loans are retail products resold by mortgage companies and brokers from wholesale lenders. Many of the fees you’ll encounter at closing come from the Mortgage Company or broker and are not required by the lender behind your loan.

That’s right, the junk fees you encounter have nothing to do with your home loan and ultimately end up in the mortgage broker’s pocket just to boost their commission at your expense. This is why finding the right person to arrange your loan is more important than slogging through home loan offers to find the lowest mortgage rates or fees. There are a great number of honest mortgage brokers willing to refinance your home loan for a one percent origination fee without marking up your mortgage rate for a commission or slipping in junk fees at closing.

Mortgage Broker Junk Fees

So what are some of the junk fees you’ll want to avoid when refinancing your home loan? One of the most notorious mortgage broker junk fees is the so called “rate lock fee.” There isn’t a single mortgage lender on the planet (not counting banks or credit unions of course) that charges a fee for locking in your mortgage rate. If you’re working with a mortgage company or broker that wants to charge you a fee for locking in that “really awesome” mortgage rate, you can be sure that this fee is going straight into that person’s pocket.

Never agree to pay a fee for locking in your mortgage rate AND make sure you get written confirmation of your rate lock from the lender, never on your mortgage broker’s letterhead. The reason you want written confirmation from the lender and not the mortgage broker is that your rate lock confirmation will tell you if the broker marked up your mortgage rate for a commission. Many brokers hide the fact that they’ve marked up your mortgage rate by typing up a bogus rate lock confirmation on their company letterhead.

Some other mortgage junk fees include mortgage broker courier fees which are another made up fee headed right into the broker’s pocket and to some extent loan processing fees. For a full list of mortgage broker junk fees you are likely to encounter at closing register for my Underground Mortgage Videos.

Hidden Mortgage Junk Fees

There is one commonly misunderstood “hidden junk fee” that can result in overpaying thousands of dollars for your next home loan. This fee is known as a POC or Paid Outside of Closing Fee found on your HUD-1 Statement. Paid Outside of Closing is a fancy way of saying “Paid Under the Table” and is a kickback for your broker marking up your mortgage rate. Also known as Yield Spread Premium, this is a fee paid by the lender when your mortgage broker locks and closes your home loan with a higher than necessary mortgage interest rate. This higher than necessary mortgage rate results in a higher than necessary mortgage payment… leading to overpaying thousands of dollars every year that you keep your mortgage loan.

Yield Spread Premium is such a big problem in the United States that the Secretary of Housing and Urban Development blamed it for fleecing American homeowners out of Sixteen Billion Dollars this year alone. The problem with Yield Spread Premium is that most homeowners don’t know how to recognize it or understand how it drives up their monthly mortgage payments unnecessarily. Don’t be a victim of Yield Spread Premium when refinancing your mortgage loan…

You can learn more about avoiding mortgage junk fees when refinancing your home loan, including the hidden junk fee known as Yield Spread Premium by checking out my Underground Mortgage Videos. Register today and you’ll have immediate online access to the mortgage videos without downloading anything to your personal computer.

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Are you considering a new mortgage loan and are looking online for Mortgage Rates Information? There are several things you need to know about the mortgage rate quotes that you get from a mortgage broker or find on the Internet that can result in overpaying thousands of dollars for your home mortgage.

Here are several tips to help you avoid paying too much when refinancing your home mortgage loan.

Mortgage Rates Information

How do mortgage rates work anyhow? With the exception of bank originated mortgage loans, mortgage rates come from wholesale lenders. These lenders don’t deal with the public directly but offer loans through mortgage brokers and other companies that resell their mortgage loans for a commission. This commission can come from two sources, the first being you and the second being the lender.

Mortgage Origination Fees

When your mortgage company or broker charges you a fee for arranging your loan this is called a loan origination fee and should appear on your Good Faith Estimate and HUD-1 Statement. A reasonable amount to pay for this origination fee is one percent of your loan amount and will be due at closing. Many mortgage brokers overcharge this origination fee and it’s not uncommon to find Good Faith Estimates with 2.5% or more. (That doesn’t mean you should pay it though…)

The second commission you need to be aware of (and this one’s important) is a fee paid by the mortgage lender. Why should you be concerned about a fee paid by the mortgage lender? If the lender’s paying the fee it’s not coming out of your pocket right…or is it?

Why would the mortgage lender pay a fee to the broker for arranging your home loan? I mean, what’s in it for them, really? Mortgage lenders know that home loans with higher than market interest rates bring them a premium profit when the loans are sold on the secondary, or investor mortgage market. Your lender pays your mortgage broker a fee for locking and closing your home loan with a higher than necessary mortgage rate. This means your monthly payment is higher than it should be to give that broker a commission. (At your expense…)

Should the broker get a commission from the lender on top of what you’re already paying them for loan origination? Your broker probably thinks so; however, there are a number of upfront and honest mortgage brokers out there willing to refinance your home for a flat one percent origination fee without slipping in junk fees or marking up your mortgage rate. My Underground Mortgage Videos will show you exactly how to find this person.

What About Bank Mortgage Loans?

You might think that you can avoid mortgage broker markup and commission simply by refinancing with your bank. The problem is that your bank knows the same thing about making a profit from the secondary mortgage market by selling your home loan. There might not be a middleman marking up your mortgage rate to get a commission from the bank; however, the bank still marks up your mortgage rate to boost their profits when selling your loan. Another problem with your bank mortgage is thanks to the Banking Lobby in the United States, banks are exempt from the Real Estate Settlement Procedures Act and are not required to disclose any of their markup or profit margins on your loan.

Bottom line if you are considering taking out a mortgage loan from your bank: you’ll never get anything close do a par mortgage rate…

Par Mortgage Rates Definiton: Any interest rate you qualify for without having to pay points up front and does not create an “extra” commission for the person arranging your loan.

How to Get the Best Deal When Refinancing

Getting the best deal on your next home mortgage loan boils down to finding the right person to arrange it for you. There are plenty of honest mortgage brokers willing to work for a one percent origination fee without marking up your mortgage rate or throwing in junk fees. Who is the best mortgage broker to refinance your home loan? It’s probably not the broker working for a large firm with expensive office spaces or a company hummer. These brokers are simply unable or unwilling to negotiate the kind of deal described here when refinancing.

Tell your prospective mortgage brokers that you are willing to pay a one percent origination fee for their services and will not accept any loan that includes Yield Spread Premium. Remember, Yield Spread Premium is the commission paid by your lender when the mortgage broker locks and closes your home loan with a higher than necessary mortgage rate. Avoiding this unnecessary markup of your mortgage rate can save you thousands of dollars every year that you keep the loan.

You can learn more about refinancing your home for a flat one percent origination fee without paying unnecessary markup of your mortgage rate or junk fees at closing by registering for my Underground Mortgage Videos. Register today and you’ll have instant online access to the mortgage videos and materials without downloading anything to your PC.

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If you’re considering refinancing your home loan a mortgage refinancing breakdown can help you spot troublesome areas of the loan offers you are considering.

There are a number of things including mortgage broker markup and junk fees that result in overpaying thousands of dollars when refinancing your home. Here is the mortgage refinancing breakdown you’ll need and several tips to help you avoid paying too much for your next mortgage loan.

Mortgage Refinancing Breakdown Online

RefiAdisor.com provides a number of resources to breakdown the refinancing process. There is a video tutorial in the member’s area that will show you how to refinance your home without paying markup of your mortgage rate or junk fees at closing. There is no cost to join RefiAdvisor.com. Registration is required to access materials in the password protect member’s area.

What to Look for When Refinancing Your Home

Mortgage refinancing can be an intimidating process. Should you refinance with a mortgage broker, your bank, or a mortgage company out of the phone book? I never recommend that anyone refinance with a bank or credit union; because of the Banking Lobby, banks and credit unions are exempt from the Real Estate Settlement Procedures Act and are not required to disclose any of their markup or profit margin on your home loan. Plain and simple, you’ll never get anything close to a Par Mortgage Rate refinancing your home with a bank or credit union.

What is a Par Mortgage Rate?

Mortgage rates change daily and on any given day “Par” mortgage rates may not be available; however, keep an eye on wholesale mortgage rates during the course of the week and you can get a par rate. What are par mortgage rates? Simply put a par mortgage rate is one that doesn’t cost you anything to get and does not create a commission for the person arranging your loan. Cost to you comes from discount points required to qualify for a specific mortgage rate and the commission for the mortgage broker comes from Yield Spread Premium. We’ll discuss Yield Spread Premium and the broker’s commission later but your goal when refinancing should be to get a mortgage rate that doesn’t cost you anything or create cash for the broker at your expense.

How To Get Par Mortgage Rates

Mortgage rates can be tricky and most of the rate quotes you encounter have been marked up one way or another for a commission. How does this commission based markup of your mortgage rate occur? Lenders reward mortgage brokers that lock and close home loans with higher than market interest rates with a commission known as Yield Spread Premium. If your home loan includes Yield Spread Premium your mortgage payment will be higher than it needs to be for the duration of your loan. Don’t get me wrong, your mortgage broker should get paid for their work; however, you don’t want this compensation driving up your payment for years to come. How should your mortgage broker get paid? Mortgage brokers receive a fee called a loan origination fee for their work and one percent of your home loan is a reasonable amount to pay. The problem is many (greedy) mortgage brokers charge origination fees and then take Yield Spread Premium on top of this which can double even triple their compensation at your expense.

You Can Avoid Mortgage Broker Markup

Many mortgage brokers become defensive and even angry when questioned about Yield Spread Premium, so how can you avoid unnecessary markup of your mortgage rate? You can start by finding the right mortgage broker for the job. We’ve already discussed why banks are a bad choice for refinancing your home loan; however, there is also a type of mortgage broker that you’ll need to avoid for the same reasons.

When the Banking Lobby had the law changed to exclude banks a number of mortgage brokers wanted in on the action and found that if they formed a company that funded home loans with their own money they could exploit the same loophole in the Real Estate Settlement Procedures Act as banks. This allows them to charge whatever they like without disclosing their markup of profit margins to their customers. Mortgage brokers that run their businesses in this manner are known as Mortgage Broker Banks and you’ll want to avoid them for the same reasons listed above.

How can you tell if a mortgage broker or company is operating as a broker bank? Ask them if they close home loans in the name of the wholesale lender or their own company. If the answer you get is that they close mortgages in their company’s name then you know you’re dealing with a broker bank and should move on to the next mortgage broker on your list. Who then is the best mortgage broker to refinance your home loan? Look for small, self-employed mortgage brokers working from home. Those mortgage brokers you see around town with their logos plastered on company hummers probably aren’t going to be willing to negotiate the kind of deal I’m describing here. Also, mortgage brokers working out of posh office spaces with expensive sales staff are another red flag when choosing a mortgage broker.

You can learn more about refinancing your mortgage without markup of your mortgage rate or lender junk fees with the online Mortgage Refinancing Breakdown in my Underground Mortgage Videos. Register today and you’ll have immediate access to the videos without downloading anything to your computer in the password protected member’s area.

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Are you considering taking out a new mortgage loan and don’t want to pay too much in the process? Are you unsure what to look for when comparing loan offers or how to screen mortgage brokers for the junk fee toting scam artists?

Mortgage rates are at all time loans but choosing the wrong person to arrange your new home loan could quickly become an expensive nightmare. Here are several tips to help you avoid paying too much for your next mortgage loan.

Getting Mortgage Help Now

The key to getting the best possible deal for your home loan is not finding the best lender, but finding the right person to arrange your loan. You don’t want to rely on a bank or a faceless mortgage giant for something as critical as your home mortgage loan; you need to find the right local, self-employed mortgage broker for the job. Why should your mortgage broker be self-employed? Large companies and brokerage firms working out of posh office spaces that employ expensive sales staff are going to be much less likely to broker the type of deal you’re looking for on your new home mortgage. Most mortgage companies simply have too much overhead and are not willing to negotiate fees. Found a self-employed mortgage broker working from home? Even better still…

What is a Good Deal on a Mortgage Loan?

Would you recognize a good deal on a mortgage loan if you found one? What makes one mortgage better than another? Is it fees from the lender or from the mortgage broker that you need to worry about? While there are underwriting fees that you’ll be required to pay, most lender fees are pretty standard when taking out a mortgage loan. The same can’t be said for mortgage broker fees… in fact the blame for most people overpaying for their home loans lies squarely with their mortgage brokers.

Mortgage Broker Compensation: What You Need to Know

Don’t get me wrong, mortgage brokers are providing a valuable service and deserve to be paid for their work; however, many brokers feel they have a right to more of your hard earned money than they deserve and use downright dirty tricks to get it. What you need to know about your mortgage broker is how they get paid for arranging your home loan. Brokers get paid in two ways; they charge you, the homeowner an origination fee for their services and they can get paid a commission by the lenders. You might think that it’s better to have the lender pay the mortgage broker’s fee than to have it come out of your pocket right? One problem with this line of reasoning is that you don’t always get to choose how your mortgage broker gets paid for arranging your loan. In fact, most brokers won’t tell you about the fee being paid by your lender and go to great lengths to hide it from you in your loan documents. Why do you think that is?

First, let’s talk about the origination fee. What is a reasonable amount to pay your mortgage broker for loan origination? Plain and simple: one percent, and not a penny more. Not one and a half percent, not two percent and for God’s sake not three percent. One of my readers commented recently that her mortgage broker charged her 1.5 percent not for the origination fee, but to lock in her mortgage rate on top of the origination fee! (Gobsmacked by the nerve of that broker) Here’s a tip… rate lock fees are pure garbage. There isn’t a single lender out there that charges a fee for locking in your mortgage rate. One percent for loan origination is more than ample compensation for the work your mortgage broker does arranging your loan.

Now what about this lender paid mortgage broker fee? Should you be concerned that the lender is paying your mortgage broker a fee for arranging your home loan? It’s not the fact that this fee is being paid by the lender that should concern you, but why the lender is paying your broker that should worry you. Why would your mortgage lender pay the broker a fee when you’re already paying a mortgage origination fee? What’s in it for them? Mortgage lenders reward brokers for locking and closing home loans with higher than market mortgage rates with a fee known as Yield Spread Premium. That’s right, for every .25 percent that your broker marks up your mortgage rate the lender pays them a commission of 1.0 percent of your loan amount. Mortgage lenders do this because home loans with above market mortgage rates bring them a premium profit when the loans are sold on the secondary market.

This one percent commission from the lender is paid in addition to the origination fee you’re already paying the mortgage broker at closing! You can see how Yield Spread Premium can effectively double, even triple your mortgage broker’s compensation for arranging your loan and why many brokers become defensive, even angry when questioned about it. You should see some of the scathing comments and emails I receive from mortgage brokers who think they are “entitled” to this fee paid by the lender at your expense. This brings me to my next point… if the mortgage broker is marking up your mortgage rate for a commission what does this do to your monthly payment amount?

Mortgage Help Is Available

Suppose for example you are refinancing your home mortgage for $315,000. Your mortgage broker quotes you an interest rate of 5.50 percent. Not bad… on a thirty year, fixed-rate mortgage your payment at 5.50 percent interest will be $1,790 per month. What you don’t know is that you actually qualified for 5.0 percent and if you had the mortgage rate that you deserve your monthly payment would have been only $1,690! That’s $1,200 per year down the drain every year just to give the mortgage broker a commission at your expense! Adding insult to injury you’re paying this mortgage broker $3,150 out of your own pocket for arranging this loan! (And that’s only if the broker agreed to a one percent origination fee…)

The good news is that you don’t have to throw your money away for an unnecessary mortgage broker commission. To learn more about avoiding Yield Spread Premium and other junk fees like mortgage rate lock fees register for my Underground Mortgage Videos. You’ll get immediate access to these online videos in the password protected member’s area without downloading anything to your home computer.

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If you’re in the process of refinancing your home mortgage you might be scouring the web in search of the “Top Mortgage Company.”

Should you worry about finding the top mortgage company when refinancing your home loan or should your focus be on finding the right person to arrange your loan?

Mortgage rates have never been lower and now is the perfect time to refinance your home loan; however, there are a number of missteps that could turn that sweet mortgage rate into a lemon you’ll be paying for years to come. Here are several tips to help you avoid paying too much for your next mortgage loan.

Who is the Top Mortgage Company?

The simple answer to this question is there isn’t one. There’s a lot of bad mortgage companies out there that you’ll need to avoid; however, there is no “best” mortgage company… here’s why. Mortgage lenders fall into three categories. First there are wholesale lenders who do not deal with the public directly but offer their loans through mortgage companies and brokers. Second, there are banks and credit unions that fund mortgages with their bank’s money and do not offer wholesale rates to their customers. The third type of lender is what’s known as a mortgage broker bank. This is a mortgage broker or company that funds loans with their own money in order to exploit a loophole in the Real Estate Settlement Procedures Act that allows them to conceal their profit margins and markup of your mortgage rate. You don’t want to deal with broker banks and I’ll tell you in a bit how to recognize if you’re dealing with one of these.

Should You Refinance With Your Bank?

Banks might be a convenient way of refinancing your home loan; however, there is a very good reason for avoiding bank mortgage loans. What could be more convenient than an automatic transfer from your checking account to your mortgage every month? The problem is banks don’t play fair when it comes to home loans. In the United States there is legislation that protects homeowners from predatory lending practices known as the Real Estate Settlement Procedures Act which requires mortgage companies to disclose their markup and profit margin on your home loan. Disclosure is a good thing right? Your bank doesn’t think so…

The Banking Lobby spent millions of dollars lobbying congress to have the Real Estate Settlement Procedures Act changed so banks and credit unions are excluded from the law…and they succeeded. Because of this loophole the bank is not required to tell you how much your mortgage rate has been marked up to generate a profit when the bank sells your home loan on the secondary market. They can charge whatever they like and don’t have to disclose anything to you. This is why you’ll never get anything remotely close to a par mortgage rate if you take out a mortgage rate from your bank or credit union.

What’s a par mortgage rate anyhow and how do you get one? Par mortgage rates should be what you’re aiming for whenever taking out a mortgage loan. A par rate is simply one that doesn’t cost you anything to get in the form of discount points or one that creates a commission for the person or company arranging your loan from Yield Spread Premium.

More on Yield Spread Premium later but let’s get back to mortgage broker banks. When the banking lobby had the law changed excluding banks from the Real Estate Settlement Procedures Act a number of mortgage brokers in the industry wanted a piece of the action and found a way to exploit the same loophole enjoyed by banks today. Mortgage brokers found that if they created a company and funded home loans with their own capital they were not required to disclose their markup or profits on your loan. These broker banks can charge people whatever they like without worrying about disclosure laws… just like a bank.

How can you tell if the person or company you’re working with is operating as a mortgage broker bank? Ask them if they will be closing your new mortgage loan in the name of a wholesale lender or in the name of their own company. If the answer is that they close loans in their company’s name then you know you are dealing with a broker bank and should move on with your search for the “Top Mortgage Company.” Oh wait a minute…we’re not focusing on finding the “Top Lender” are we? We’re looking for the right person to arrange your next home mortgage loan…

How to Find the Right Person to Arrange Your Next Mortgage Loan

Who is the right person to work with when refinancing your home loan? We already know that banks, credit unions, and mortgage broker banks take advantage of their customers by exploiting a loophole in the Real Estate Settlement Procedures act so that leaves mortgage brokers that offer loans exclusively from wholesale lenders, but not just any broker. Mortgage brokers are basically salespeople that offer mortgage loans from wholesale lenders for a commission. If you want to avoid overpaying when working with a mortgage broker you need to understand how brokers get paid for arranging your loan.

How Your Mortgage Broker Gets Paid

Mortgage brokers get paid for their work in two ways. Your broker can charge you a fee known as a loan origination fee, also called origination points, which will appear on your Good Faith Estimate and HUD-1 Statement. By the way, the Good Faith Estimate (GFE) these days isn’t worth the paper it’s printed on… your GFE is little more than a marketing tool to get you to commit to an overpriced mortgage loan. Pay close attention to your HUD-1 Settlement Statement as this is the final word legally when it comes to what you’ll pay for your mortgage.

The second way mortgage brokers get paid is from a fee or commission paid by the lender. Should you care if the lender pays your mortgage broker a fee? It’s not coming out of your pocket right? It isn’t the fact that your lender is paying the broker a commission that should concern you but why the lender is paying your mortgage broker this fee. Brokers get paid by the lender for locking and closing home loans with higher than necessary mortgage rates. This fee created when the mortgage broker closes your mortgage with too high a mortgage rate is called Yield Spread Premium and it drives your monthly payment up unnecessarily.

Avoiding the commission based markup of your mortgage rate should be your number one priority when refinancing and is the subject of my Underground Mortgage Videos streaming to you online from this website. Yield Spread Premium can cost you thousands of dollars per year in unnecessary mortgage interest and the way to avoid it is by refinancing with the right mortgage broker.

You can learn more about refinancing your home loan with the right mortgage broker while avoiding Yield Spread Premium and other junk fees by registering for my Underground Mortgage Videos. Register today, the videos stream to your PC or Mac without downloading anything.

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Are you searching the Internet for Home Mortgage Refinancing Rates?

Mortgage rates are at their lowest levels in history so it’s very easy to find a good rate; however, if you want the lowest mortgage rates possible without overpaying the broker for a loan that doesn’t include junk fees there are a few things you’ll need to know.

Here are several tips to help you avoid overpaying for your next home loan while getting super low home mortgage refinancing rates.

Home Mortgage Refinancing Rates Online

The Internet is an excellent tool for researching mortgage rates; however, there are several precautions you need to take. If you’re looking at one of the big mortgage sites like Lending Tree, always check out their disclosure statement to see how they get paid for their services. Here’s a sample from Lending Tree’s disclosure statement…

Lending Tree does not charge you (the homeowner) any fee for its services. Computerized loan origination fees paid by the Lender may be included in your mortgage rate, points or loan term and will be shown on your settlement statement. (Meaning you’re paying the fee indirectly…still sounds like you’re paying Lending Tree a fee to me, what do you think?)

What’s a computerized loan origination fee anyway? Many of the websites you find on the Internet like Lending Tree do nothing but collect information and sell it to mortgage companies and brokers for a fee. The broker or lender turns around and passes the fee on to you in the form of a Computerized Loan Origination Fee which will appear on your Good Faith Estimate and HUD-1 Settlement Statement. Do you need to pay this fee to the Lending Trees of the world for selling your information? Absolutely not…

What about your mortgage rate? According to Lending Tree, the fee that they receive can also be included in your mortgage rate. The markup of your mortgage rate for a fee is known as Yield Spread Premium and you should know that the Secretary of Housing and Urban Development recently said this markup will cost American homeowners sixteen billion dollars this year alone…

Lending Tree’s claims of not charging a fee for their services simply aren’t true. The fee still comes out of your pocket; it’s just not paid to lending tree directly… When you pay this the form of a higher mortgage rate it’s the fee that keeps costing you all year long.

Lending Tree isn’t the only one out there that marks up your mortgage rate for fun and profit; in fact, most mortgage brokers routinely include Yield Spread Premium in their loans without fully explaining what they’re doing. Many mortgage brokers will tell you not to worry about this fee because it’s not coming out of your pocket; however, it’s not the fact that your lender is paying the broker a fee, but why they’re paying this fee that should concern you.

Yield Spread Premium: What You Need to Know

In the simplest definition Yield Spread Premium is a percentage of your loan amount (cash) created for the mortgage broker when they lock and close your home loan with an above market mortgage rate. This markup of your mortgage rate leads to a higher monthly payment and more cash out of your pocket. In fact, the mortgage broker is paid one percent of your loan amount for every .25 percent they markup your rate. The markup of .25 percent doesn’t sound like much but it can add a hundred dollars or more to your payment, adding up to thousand dollars or more per year.

There is good news since you’re reading this today… Yield Spread Premium can be avoided. It is possible to find a mortgage broker willing to arrange your home loan for a one percent origination fee without marking up your mortgage rate for a commission. You just need to know how to negotiate the deal. My Underground Mortgage Videos show you how to do just this while avoiding lender junk fees. You’ll also learn what you can do to give your credit a tune-up prior to applying.

Bank Mortgage Loans & Service Release Premium

Some homeowners think they can avoid mortgage broker’s fees and markup by refinancing their mortgage loan with a bank or credit union. The bad news is the bank charges the same markup on your mortgage rate as the broker; it just has a different name. Banks markup their mortgage rates to make a profit when your loan is sold to investors on the secondary market… loans with higher than market rates bring the bank premium profits.

When the bank marks up your mortgage rate to make this profit the markup is called Service Release Premium. The bank is not required to disclose this markup to you because they are exempt from the Real Estate Settlement Procedures Act which requires mortgage brokers to disclose the Yield Spread Premium the receive from the lender. Because banks don’t have to disclose their markup or profit margin on your mortgage you’ll never get as good a deal from your bank as you could refinancing your mortgage with an honest mortgage broker.

You can learn more about getting the best possible Home Mortgage Refinancing Rates without lender junk fees by registering for my Underground Mortgage Videos. Register today and you’ll have immediate access to the mortgage videos and a list of mortgage brokers in your area that do not mark up rates for a commission in my password protected member’s area, without downloading anything to your PC or Macintosh.

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Did you know your mortgage broker has a dirty little secret? Most professions have a few skeletons in the closet but this one could cost you thousands of dollars every year that you have a home loan unnecessarily.

In fact, this “secret” is so bad that the Secretary of Housing and Urban development said it will be responsible for fleecing American homeowners out of sixteen billion dollars this year alone. What is it? Read the following mortgage tips to help you avoid paying too much for your next home loan.

Mortgage Brokers Compensation

Mortgage brokers should be paid for their work like anyone else; however, like a used car salesman they have ways of padding their commission at your expense. You can expect any mortgage brokers you work with to charge you an origination fee for their services. This origination fee will be clearly marked on your Good Faith Estimate and HUD-1 statement; however, there is a hidden mortgage broker fee you need to be aware of before refinancing your home mortgage.

Mortgage Brokers Secrets

The second way mortgage brokers get paid for their work is a hidden commission from the lender. This commission will never appear on your Good Faith Estimate and most brokers have clever ways of disguising it on your HUD-1 settlement statement. This secret commission from the mortgage lender is called Yield Spread Premium and if you agree to a mortgage with this hidden markup it can cost you thousands of dollars every year that you keep the loan.

Yield Spread Premium is Hidden Markup

Here’s how Yield Spread Premium works. Suppose you are refinancing your home for $250,000 and the mortgage broker quotes you an interest rate of six percent while charging you a two percent origination fee. On the surface six percent sounds like a good deal, even though the origination fee is double what you should be paying, you agree to the loan. This means you have to pay $5000 to the broker for loan origination, your home gets refinanced and everything went smoothly, right? Wrong… What your mortgage broker isn’t telling you is that you were approved for a mortgage rate of 5.25 percent, but they marked it up to get Yield Spread Premium from the lender.

Yield Spread Premium is a percentage of your loan amount created when mortgage brokers lock and close loans with higher than necessary interest rates. You get stuck with a payment based on an interest rate higher than you deserve just to create a commission for the broker. A commission paid in addition to the loan origination fees your mortgage broker is already probably overcharging you…

Hidden Mortgage Markup

How does this hidden markup of your mortgage rate affect your monthly payment amount? In the previous example Yield Spread Premium adds a hundred dollars a month to the payment for a thirty year fixed rate mortgage. That’s $1200 a year you’re throwing down the drain due to your mortgage broker’s deception! Most mortgage brokers don’t talk about Yield Spread Premium and many become angry and defensive when questioned about the markup. Can you blame them? Yield Spread Premium effectively doubles even triples their compensation on the loan… at your expense of course.

You Can Avoid Overpaying for Your Next Mortgage

You don’t have to be a financial guru to get a good deal on your next home mortgage loan. Tell potential mortgage brokers that you will not accept any loan that includes Yield Spread Premium and that you’re willing to pay a one percent origination fee for their services. There are honest mortgage brokers out there willing to work for a one percent origination fee without marking up your mortgage rate and I can send you a list of them in your area.

There are other mortgage junk fees that you need to keep an eye out for: mortgage broker courier fees and rate lock fees are examples of junk fees you should never agree to pay when refinancing your home loan. Before closing on the new loan make sure you get a copy of the HUD-1 settlement statement and go through it with a fine-toothed comb; don’t rely on the Good Faith Estimate to look for these junk fees as this document is little more than a marketing tool used to lure homeowners into overpriced loans.

What About Bank Mortgage Loans?

Can’t you avoid all of this markup and trickery by mortgage brokers simply by refinancing with a bank mortgage loan? While it’s true that your bank doesn’t charge Yield Spread Premium on their loans because your loan is funded with the bank’s money; however, banks have another kind of markup called Service Release Premium that accomplishes the same thing. Also, your bank doesn’t have to disclose Service Release Premium to you because of a loophole in the Real Estate Settlement Procedures Act. You’ll never get as a good a deal from your bank as you could from an honest mortgage broker that hasn’t included Yield Spread Premium on your loan.

What is a Good Mortgage Rate Anyway?

Refinancing your home loan and dealing with mortgage brokers and lenders can be overwhelming. How do you know a good deal when you spot one? The ideal mortgage rate when refinancing your home is what’s known as a par mortgage rate. “Par Mortgage Rates” are ones that don’t cost you discount points to get or create any commission for the Mortgage Company or broker. You’ll never get a par mortgage rate from any bank or credit union and can only get this from the right mortgage broker.

To learn more about refinancing your home loan with the lowest mortgage rate without junk fees or mortgage broker markup register for my Underground Mortgage Videos. You’ll have immediate online access to the mortgage videos as well as a list of mortgage brokers in your area that do not mark up mortgage rates for a commission without downloading anything to your PC or Mac.

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Mortgage loan origination fees are a fee charged by the person arranging your loan and are a common way to overpay for your mortgage loan.

The origination fees you pay are just one of the ways mortgage brokers receive compensation for their work; there are other forms of compensation that raise your monthly payment and cost you thousands of dollars.

Here are several tips regarding Mortgage Loan Origination Fees to help you avoid paying too much for your next mortgage loans.

Mortgage Loan Origination Fees

Origination fees are also called origination points and are a fee charged by the person arranging your home loan at closing. Remember that one “point” is one percent of your loan amount. A reasonable amount to pay for mortgage loan origination fees is one point, or one percent of your loan amount; however, many brokers pad their fees and try and charge you much more. If you’re upfront with the broker when shopping around it is possible to find honest mortgage brokers willing to work for one percent.

Other Mortgage Broker Compensation

Mortgage brokers are basically salespeople reselling mortgage loans from wholesale lenders for a commission. Much like a salesman on a used car lot they’re looking to boost their commission in any way possible, even at your expense. This is the mortgage industry’s dirty little secret…lenders reward brokers that lock and close home loans with above market interest rates with a hefty commission. This commission often doubles, even triples the broker’s compensation from your loan…driving your monthly payment up unnecessarily.

Beware Yield Spread Premium

How does this unnecessary markup of your mortgage rate work? Did you know that for every .25 percent that your mortgage broker overcharges you the lender pays them one percent of your loan amount? That quarter point may not seem like much; however, many brokers don’t stop there and mark their loans up by as much as .75 percent or more. This markup adds hundreds of dollars to your monthly payment which is thousands of dollars you’re throwing away just to give the mortgage broker a bonus.

Mortgage brokers don’t talk about Yield Spread Premium because it is such a significant part of their bottom line. Many brokers become angry and defensive when questioned about Yield Spread Premium and have clever ways of hiding it in your loan documents. Were you charged a fee for locking in your mortgage rate and did the rate lock confirmation come on the broker’s letterhead? This is the first sign of a dishonest mortgage broker. Mortgage lenders DO NOT charge fees for locking in a mortgage rate… this “rate lock fee” is pure garbage. The fact that your rate lock confirmation did not come from the lender means the broker is hiding their markup of your mortgage rate because the lenders rate lock confirmation clearly shows any Yield Spread Premium associated with your mortgage rate.

How to Avoid Yield Spread Premium

Just like your origination fee, Yield Spread Premium on your mortgage loan can be negotiated. Look for mortgage brokers that are self employed working out of home or small office spaces. These brokers don’t have the overhead of large firms and are much more likely to negotiate with you on their fees. Tell the mortgage broker upfront that you will not accept any home loan that includes Yield Spread Premium and are willing to pay a one percent origination fee for their services. If the mortgage broker agrees to these terms when you lock in your rate make sure the rate lock confirmation comes from the lender and there is no Yield Spread Premium present on the lock.

What About Bank Mortgage Loans

Can’t you just avoid this entire mortgage broker hubbub by taking out your mortgage from a bank or credit union? While it is true banks are convenient when it comes to mortgage loans you’ll never get anything close to the deal you could get from a mortgage broker. Banks don’t charge Yield Spread Premium on their loans because they fund mortgage loans with the bank’s money; however, banks have their own markup, known as Service Release Premium. Your bank is not required to disclose anything about this markup to you due to a little known loophole in the Real Estate Settlement Procedures Act, meaning you’ll never know the rate you could have gotten from a mortgage broker.

Banks don’t offer their customer par mortgage rates, nor do most mortgage brokers. A par mortgage rate is one that doesn’t cost you discount points to get and does not create a commission for the broker from Yield Spread Premium. Getting a par mortgage rate for yourself is not as hard as you think; you don’t have to be a financial guru to negotiate a deal like the one I’ve described here… you just need to find the right mortgage broker for the job.

You can learn more about Mortgage Loan Origination Fees and finding the best mortgage rate without overpaying the broker while avoiding junk fees by registering for my Underground Mortgage Videos. You will have immediate access to all videos including a list of mortgage brokers in your area that do not mark up mortgage rates without downloading anything to your Mac or PC.

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Are you considering cashing out equity in your home when refinancing your mortgage?

Your home can be an excellent source of cash if you’re willing to give up some of your hard-earned equity in exchange for liquidity.

Cash out mortgage refinancing is one way to get your hands on cash for everything from consolidating bills, home improvement, even paying for college. Here are several tips to help you get the most for your hard-earned equity when cash out mortgage refinancing.

Cash Out Refinancing: What You Need to Know

Taking cash back when refinancing your mortgage is simply borrowing more than you owe on your existing home loan and pocketing the cash. Take the money and run right? If you’ve had your existing mortgage for a while the principle balance is probably much lower than it was when you purchased your home. Provided your home’s value hasn’t dropped significantly due to the faltering economy your build up of equity allows you to refinance and take cash back at closing.

Suppose for example you owe $110,000 on a $300,000 home and want to take back $25,000 in cash to build an addition to your home. You could refinance your existing home loan for $135,000 and walk away from closing with $25,000 cash in your pocket.

Since it’s your money you can use the cash for anything: home improvement, purchasing a second home, paying college tuition, consolidating higher interest debt like credit cards, anything really. Mortgage interest rates are at historically low levels right now and because of the market lenders are desperate to deal. Keep in mind that refinancing with cash back is different from taking out a Home Equity Line of Credit (HELOC). Home equity lines tend to be more expensive and often carry higher interest rates than if you had refinanced with cash back.

How Much Cash Can You Take Out Refinancing?

Usually, you’re allowed to refinance up to 80% of your home’s value. Some lenders may allow you to borrow more; however, you may be required to purchase Private Mortgage Insurance (PMI), or settle for a higher mortgage rate. You can avoid Private Mortgage Insurance by opting for a Home Equity Line of Credit; however, this is usually a more expensive option than cash out mortgage refinancing.

Refinancing your mortgage is generally a good idea when current mortgage rates are lower than your existing home loan. Cash back refinancing is one reason for taking a higher mortgage rate…if you need the cash you may be able to justify the higher monthly payment. Keep in mind that cash out mortgage refinancing is not without risks; you are giving up a portion of your equity and with declining property values there is a chance you could end up underwater in the new mortgage loan.

Cash Out Refinancing Pitfalls

There are a number of problems with cash out refinancing that can result in overpaying thousands of dollars every year that you’re in your mortgage loan. Because you’ll likely end up with a higher monthly payment than you’re used to when taking cash back you have to be careful to avoid anything that could potentially raise your payment on top of this. What raises your mortgage payment unnecessarily? Yield Spread Premium…the commission paid by the lender for locking and closing your loan with a higher than necessary mortgage rate.

Mortgage brokers earn their commission from two sources. They can charge you an origination fee for their part in arranging your home loan and they can take a commission from the lender in the form of Yield Spread Premium. It is possible to cash out refinance your home paying only a flat one percent origination fee without Yield Spread Premium if you follow the guidelines in my Underground Mortgage Videos; however, most homeowners pay much more than this.

How does the commission from Yield Spread Premium drive up your mortgage payment unnecessarily? First of all, for every .25 percent that the mortgage broker overcharges you the lender pays a commission of 1.0 percent. It’s not uncommon to find mortgages done with .75 percent or higher markup on the mortgage rate. In fact, you’re probably paying this much on your existing home loan now.

Here’s an example to illustrate why you need to avoid Yield Spread Premium when cash out mortgage refinancing. Suppose you owe $200,000 on your existing mortgage and your home is worth $350,000. You’ve decided to cash out refinance $50,000, making the balance of your new loan $250,000. Your mortgage broker tells you that you qualify for an interest rate of 6.5 percent and charges you an origination fee of 2.0 percent.

First of all, had you watched my Underground Mortgage Videos you could have paid a flat 1.0 percent origination fee and saved yourself $2,500 right off the bat…but what about that mortgage rate? What your broker isn’t telling you is that you actually qualified for 5.75 percent mortgage loan; however, they’ve marked your rate up to get a 3.0 percent commission from the lender. This three percent is in addition to the 2.0 percent origination fee that you’re already overpaying. In this transaction your mortgage broker walks away with $12,500 for their part in arranging your lemon of home loan…now let’s take a look at what you got stuck with shall we?

You already know that you paid $2,500 too much for the origination fee but what about that 3.0 percent Yield Spread Premium? At 6.5 percent your monthly payment on a thirty year fixed rate mortgage will be $1,580. If you had gotten the mortgage rate you deserve at 5.75 percent your payment would only be $1,450! In addition to the $2,500 you overpaid for loan origination you’re throwing away $1,560 every year that you keep this loan!

Can you now see how people get screwed over on their mortgage loans and why the Secretary of Housing and Urban Development said homeowners in the United States will overpay sixteen billion dollars for their home loans this year alone?

Now that you know how people get ripped off refinancing their mortgage loans what can you do to make sure you’re not a victim of this unnecessary mortgage rate markup? Register today for my Underground Mortgage Videos and you’ll discover how to get the best deal for your next mortgage loan without markup or junk fees.

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Are you in the process of taking out a new home loan and want advice on negotiating refinancing?

Negotiating with your mortgage broker can help you avoid unnecessary markup of your mortgage rate and lender junk fees that result in overpaying thousands of dollars when refinancing your home.

Here are several tips to help you when negotiating refinancing to avoid overpaying for your next mortgage loan.

Negotiating Refinancing with a Mortgage Broker

The first thing you need know is that it’s important to use a mortgage broker when refinancing and to avoid your Bank or Credit Union. Banks are exempt from disclosure laws that protect you from predatory lending practices; while your bank might not be out to rip you off, because of this legislation you’ll never get anything close to “par” mortgage rates from a bank or credit union. This is because the Banking Lobby spent millions of dollars getting banks excluded from the Real Estate Settlement Procedures Act.

What are “Par Mortgage Rates?” Par mortgage rates are simply those that don’t cost you anything to get and do not create a commission for the person or bank arranging your loan. Banks don’t hand out par mortgage rates to anyone, (including you) so the only way to get them is by negotiating refinancing with the right mortgage broker. Notice that I said “the right mortgage broker.” Who is the right mortgage broker for your next home loan?

How to Find the Right Mortgage Broker for the Job

Self employed mortgage brokers are your best bet for negotiating the deal you’re looking for when refinancing your mortgage. The self employed broker is much more likely to agree to refinance your loan with a par mortgage rate than the mortgage broker that employs an expensive sales staff or works in a posh office space. Can you find a self employed mortgage broker working from their home? Even better…Also, the ideal mortgage broker for the job has at least ten years experience. Find this person and you’ll be able to refinance for a flat one percent origination fee without paying commission based markup of your mortgage rate.

How to Negotiate with Your Mortgage Broker

Before you can negotiate with your mortgage broker you need to understand how this person is compensated for arranging your loan. Mortgage brokers receive compensation from two sources: you and your lender. First, you’ll be charged an origination fee for the broker’s part in arranging your home loan. This fee can be as high as three percent or more; however, a reasonable fee to pay for this mortgage broker fee is only one percent of your loan amount.

The second way mortgage brokers get paid is from a commission paid by the lender. Mortgage lenders pay a commission to brokers that lock and close home loans with higher than market mortgage interest rates. This markup of your mortgage rate by the broker creates a commission known as Yield Spread Premium. The mortgage broker gets a commission and you get a higher than necessary mortgage rate which drives up your monthly mortgage payment. The only way to avoid Yield Spread Premium is by finding and negotiating with the right mortgage broker.

Tell your mortgage broker that you’re willing to pay a flat one percent origination fee and that you will not accept a home loan that includes Yield Spread Premium. If your mortgage broker agrees to your terms then you’ve found the right person for the job. If the broker becomes defensive or angry when discussing Yield Spread Premium, move on to the next person.

Beware Mortgage Broker Junk Fees

Before closing on your new mortgage loan you’ll need to take a hard look at the fees found on your HUD-1 statement. Don’t use the Good Faith Estimate for this; the GFE is practically worthless for rooting out junk fees since it’s just an estimate given “in good faith.” Pay close attention to all mortgage broker and processing fees listed on your HUD-1. Anything listed as a “mortgage broker courier fee” or a “rate lock fee” is pure garbage and headed for your mortgage broker’s pocket.

Check your HUD-1 section 800 for anything that resembles Yield Spread paid to broker or POC fees. POC stands for “Paid Outside of Closing” and is just a way of disguising Yield Spread Premium on your mortgage loan. Be careful when reviewing your HUD-1; mortgage brokers have clever ways of hiding their junk fees. If you don’t understand a fee listed in your loan documents don’t be afraid to question your mortgage broker.

You can learn more about negotiating refinancing with your mortgage broker for the lowest Mortgage Rates while avoiding junk fees by checking out my Underground Mortgage Videos. Register today and you’ll have immediate access to the video guide and a list of mortgage brokers in your area without downloading anything to your PC or Mac.

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If you are in the process of refinancing your home mortgage there are a number of costly pitfalls that can lead to overpaying thousands of dollars.

Rate locks are commonly misunderstood by many homeowners and not locking properly can lead to an expensive mistake. Here are several tips to help you avoid paying too much for your next home mortgage loan.

Verbal Interest Rate Lock

When it comes to locking in your mortgage rate there is one simple rule. If you haven’t got it in writing, you haven’t got it at all. When it comes to mortgage loans, verbal agreements just don’t exist. You must get it in writing AND the rate lock confirmation HAS to come from the lender, not your mortgage broker. Here’s why.

Many mortgage brokers try and pass off rate lock confirmation written on their own company letterhead. If you have a document from your mortgage broker confirming rate lock, then you do not have written confirmation of the lock. Mortgage brokers do this to conceal the commission they are getting from the lender for marking up your mortgage rate. Lenders pay a premium to mortgage brokers that lock and close home loans with higher than market interest rates. This commission paid to your mortgage broker is known as Yield Spread Premium and can unknowingly cost you thousands of dollars per year.

Bottom line, if your mortgage broker tells you that you have verbally locked your interest rate or they give you a bogus written confirmation typed up on their own letterhead, your mortgage broker is hiding the fact that they’re ripping you off.

Mortgage Yield Spread Premium

Mortgage brokers are compensated for their work by charging you an origination fee for arranging your home loan. They can also receive a commission from the lender for marking up your mortgage rate. For every .25 percent that you agree to overpay when refinancing your mortgage loan, the broker receives a commission of one percent of your loan amount for overcharging you. This markup of .25 percent may not seem like much; however, many brokers charge as much as .75 percent (or more) and over the course of a year this can have a dramatic affect on your mortgage payments.

Here’s a simple example to illustrate how commission based markup of your mortgage rate results in paying too much. Suppose for example you are refinancing your home for $315,000. Your broker quotes you a mortgage rate of 5.75 percent and charges you a fee of 1.5 percent for arranging your loan. On paper these numbers should good; however, consider the 1.5 percent or $4,725 that you’re paying the mortgage broker for “getting you a good deal.”

What your mortgage broker isn’t telling you is that your lender qualified
you for a 5.0 percent mortgage rate but your broker marked it up to 5.75 percent to get a 3.0 percent commission from the lender. That means your broker pockets your $4,725 AND $9,450 from the mortgage lender…that’s a total of $14,175 for overcharging you on your home mortgage loan.

How does this .75 percent affect your mortgage payment amount? Plug the numbers into a simple mortgage payment calculator and you’ll see that in this example the payment amount for a 30 year, fixed-rate mortgage loan of $315,000 at 5.75 percent will be $1,840 per month. If you had the mortgage rate you deserve at 5.0 percent your monthly payment would only be $1,690. That’s a savings of $150 per month or $1,800 per year!

Now you know that a verbal interest rate lock is not the right way to refinance because your mortgage broker is using it to conceal the Yield Spread Premium on your home loan. How can you avoid this costly and unnecessary markup of your mortgage interest rate?

How to Avoid Overpaying Your Mortgage Broker

To avoid paying Yield Spread Premium when refinancing your home loan you simply need to find the right mortgage broker for the job. There are honest brokers out there willing to refinance your home for a flat one percent origination fee without charging Yield Spread Premium on your loan… you just need to find the right one. You don’t have to be a financial guru to pull this off either; learn the lingo and a few tips for negotiation with your mortgage broker and you can walk away with the deal I’m describing for your next home loan. My underground mortgage videos show you how to do just this…all of the information you need to save thousands of dollars on your next mortgage in one easy to follow video tutorial.

So who is the right mortgage broker? It’s probably not going to be the brokers with the full page advertisement in your phone book or the one with a company hummer plastered with their logo. Mortgage brokers with advertising budgets, expensive sales staff, posh office spaces, and company hummers all have enormous operating expenses and will most likely be unwilling or unable to negotiate the type of deal you’re looking for when refinancing your home mortgage.

The right person for the job is a small time self-employed mortgage broker often working from home. This person will have been working as mortgage broker for at least ten years. This kind of mortgage broker will be much more likely to agree to refinance you home for a one percent origination fee without bringing Yield Spread Premium into the picture. You’ll also need to know which fees are garbage and need to be avoided… fees like mortgage broker courier fees for example. You’ll need to know where to spot and how to recognize these junks fees; here’s a tip, you won’t find them on your Good Faith Estimate.

Good Faith Estimate

Speaking of the Good Faith Estimate (GFE), don’t put much faith in this document. The GFE has become little more than a marketing tool used along with the Annual Percentage Rate (APR) to lure unsuspecting homeowners into overpriced mortgage loans. Truth in lending laws require that lenders provide you these documents; however, there are very few standards for what mortgage lenders are required to disclose. Fortunately your lender is required to give you one document prior to closing that will reveal everything your mortgage broker may be working so hard to conceal…

You can learn more about mortgage refinancing without the unnecessary markup of your mortgage rate and lender junk fees by registering for my Underground Mortgage Videos. Register today and you’ll have immediate access in the password protected member’s area to all the mortgage videos without downloading anything to your PC or Mac.

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Considering refinancing your home mortgage loan this year?

A home mortgage refinance can save you a lot of money if you go about it the right way. Did you know the mortgage rate you have on your home now was marked up by the person arranging your loan for a commission?

You’ve been paying too much ever since purchasing your home just to give that mortgage broker a commission from the lender. Don’t worry; you’re not alone… in fact, according to the Secretary of Housing and Urban Development this hidden mortgage commission will cost homeowners in the United States sixteen billion dollars this year alone. Want to save a few thousand bucks on your next mortgage loan? Read on… I’ve got the low down on refinancing your home loan for you without paying too much for your next mortgage loan.

Home Mortgage Refinance Tips

You don’t have to be a financial guru to get a good deal on your next mortgage loan. Mortgage loans are retail products like anything else you buy today; you just need to know how to recognize and avoid the crap people are shoveling to make a buck at your expense. Mortgage brokers have earned themselves a reputation for being sleazy used car salesman in recent years… and rightly so. This doesn’t mean you should avoid using a mortgage broker when refinancing your home. Mortgage brokers have access to wholesale mortgage rates which is something you’ll never get from a bank or credit union.

Wholesale Mortgage Rates

You’re familiar with wholesale prices when it comes to retail products but what about mortgage loans? Mortgage rates are no different; in fact, home loans are retail products being resold by mortgage companies and brokers for a commission. How to mortgage companies and brokers make their money? They make money from two places: you and your mortgage lender.

Your mortgage company or broker can charge you an origination fee, often called “origination points” for their part in arranging your home loan. This fee is often overcharged. A reasonable fee for loan origination is one percent of your mortgage amount but it’s not uncommon to see this fee as high as three to five percent. Never pay this much for a mortgage broker origination fee.

The second source of compensation for your Mortgage Company or broker is a little known kickback called Yield Spread Premium. Simply put this is a fee paid by the lender when your loan originator locks and closes your home loan with a higher than market mortgage rate. You’ll see market or the so called wholesale mortgage rates referred to as par mortgage rates.

Par Mortgage Rates

A par mortgage rate is simply one that does not cost you anything to get or create any money for the Mortgage Company or broker arranging your home loan. Mortgage rates that cost you money require discount points be paid at closing. Remember that one point is one percent of your mortgage amount and a discount point is a fee paid to lower your mortgage rate. If you have to pay cash at closing to qualify for a specific mortgage rate this is not a par rate; likewise if your mortgage rate creates a commission for the broker it is not a par rate either. If you want the best possible deal when refinancing your home loan you want to get as close to a par mortgage rate as possible.

Avoiding the unnecessary markup of your mortgage rate to generate a commission for the mortgage broker is easier than it sounds. You just need to find the right broker for the job and forget about refinancing with your bank or credit union. Banks fund their loans with the banks money and are not required under the current disclosure laws to tell you how they’ve marked up your interest rate. Compare a par rate to your banks “great deal” and you’ll see how much they overcharge their customers.

You can learn more about a Home Mortgage Refinance with par mortgage rates without paying lender junk fees in the process by registering for my free Underground Mortgage Videos. Register Today and you’ll have immediate access to the membership area without downloading anything to your PC. Following my simple guidelines for avoiding mortgage broker commission and junk fees will literally save you thousands of dollars every year you pay on a mortgage loan. Did I mention that the videos are free?

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If you are considering mortgage refinancing for any reason this year, there are several things you need to know in order to avoid overpaying for your next home loan.

Lender junk fees and mortgage broker markup of your mortgage rate can quickly turn a sweet deal into a costly lemon of a home loan.

Mortgage refinancing with your bank or credit union won’t save you from mortgage broker markup like you might think. Here are several tips to help you avoid paying too much and getting burned with your next mortgage loan.

Banks vs. Mortgage Brokers

Many people think they can avoid paying mortgage broker fees by refinancing their home loan with a bank. After all, your bank is a direct lender right? Unfortunately banks are just as guilty, if not more so of taking advantage of and overcharging their customers as mortgage brokers. In fact, the Banking Lobby in the United States spent millions of dollars having the disclosure laws changed to exclude banks. That’s right; your bank is exempt from the Real Estate Settlement Procedures Act and is not obligated to disclose their profit margin or markup on your home loan.

Mortgage brokers on the other hand have access to wholesale rates and if you find the right broker willing to work for a flat origination fee, you can save yourself thousands of dollars per year. Much like your bank, mortgage brokers can mark up your mortgage rate for a commission from the lender. This commission is known as Yield Spread Premium and if you want the best deal when refinancing your home you’ll need to avoid this unnecessary markup.

What You Need to Know About Mortgage Rates

Most of the mortgage rate quotes you find online include some amount of Yield Spread Premium. Never heard of this markup? Don’t worry, most homeowners haven’t and according to the Secretary of Housing and Urban Development will overpay nearly sixteen billion dollars this year alone because of it. So what is Yield Spread Premium? It is simply a percentage of your loan amount created for the mortgage broker for locking and closing your home loan with a higher than necessary mortgage rate. Lenders reward mortgage brokers for closing loans with higher than market rates because these loans bring them a premium profit when your loan is sold on the secondary market.

For every .25% that your mortgage broker marks up your mortgage rate the lender pays them a commission of one percent of your loan amount. This is paid in addition to any loan origination fees that you’re already paying, and probably paying too much more. It is possible to refinance your mortgage paying a flat origination fee of one percent without markup of your mortgage rate. This is a deal that you’ll never get from your bank or credit union and will save you thousands of dollars every year you keep the loan.

How to Refinance Your Mortgage

The first thing you’ll need to do is find the right mortgage broker for the job. Your friend’s cousin probably isn’t going to be the right broker nor will the ones with full page ads in the phone book, company hummers, and posh office spaces. These mortgage brokers employ expensive sales staff and offices spaces and are going to be much less likely or unable to negotiate the kind of deal you’re looking for when mortgage refinancing. Someone has to make the hummer payment for them right? Just make sure it’s not you.

The best mortgage broker for the job has at least 10 years of experience, is self-employed, and if you can find one working out of their home, even better. These brokers don’t have the expensive overhead and will be more receptive to negotiate with you, especially since you’ll know how to talk to them after watching my Underground Mortgage Videos. Remember, your goal is to avoid Yield Spread Premium when refinancing and to do that you have to find the right person for the job.

Why Yield Spread Premium Is Such a Problem

Here’s an example to illustrate how this commission based markup by the mortgage broker drives up your monthly payment unnecessarily. Suppose you are refinancing your home for $275,000 and your mortgage broker quotes you an interest rate of 5.75%. You agree to pay a loan origination fee of 2.5% and think you’re getting a great deal with your now much lower mortgage payment.

What your mortgage broker didn’t tell you is that the lender approved you for a mortgage rate of 5.0%, but they’ve marked it up to get 3% cash back from the lender as commission. This is in addition to the 2.5% you’ve overpaid for the loan origination fee. In this example your mortgage broker is stuffing their pockets with $15,125 at your expense. You get stuck with a higher than necessary mortgage payment, in addition to shelling out too much cash for your home loan.

With the inflated mortgage rate at 5.75% your monthly payment of a $275,000, 30 year, fixed-rate mortgage loan will be $1600. If you had the mortgage rate you deserve at 5.0% your monthly payment would only be $1,475 per month! That’s a savings of $1500 per year! Remember, you don’t have to be a financial guru to get the kind of deal I’m describing here; you just need to know how to find and negotiate with the right mortgage broker.

You can learn more about mortgage refinancing without paying mortgage broker markup or lender junk fees by registering for my Underground Mortgage Videos. The mortgage videos are free and you can watch them today without downloading anything to your PC.

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When it comes to refinancing your home loan, the more you know, the more you’ll save.

Refinancing your home mortgage without paying too much involves cutting through lender hype and carefully evaluating your mortgage needs and choices. Here are several tips to help you avoid overpaying for your next home mortgage loan.

Should You Refinance Your Mortgage?

Many people refinance to improve the terms of their mortgage loans. Getting a “better” loan can mean different things to different homeowners. For you, a better home loan could have a lower mortgage rate and payment amount, it could mean converting a risky adjustable rate mortgage to a fixed rate loan, or it could mean taking cash back for home improvements.

Whether or not you should refinance depends on your needs and when or if you’ll break even on the new loan. If you’re taking cash back you might end up with a higher mortgage rate than you have now; in this case you’ll probably not recoup your expenses from refinancing. If you’re trying to save money on your mortgage the decision to refinance can be based on how long it will take you to recoup your expenses from taking out a new loan. You can easily determine this by dividing your total closing costs and fees by how much lower your new monthly payment amount will be. This will tell you the number of months it will take you to break even on the new loan.

How Hard is Qualifying to Refinance?

Mortgage lenders tightened their requirements when Freddie Mac and Fannie Mae changed the percentage of your home value that can be financed. Lenders have much narrower criteria for judging acceptable credit and there are fewer loan options available today. If you purchased your home with a sub-prime or stated income mortgage loan you could find it difficult to refinance your mortgage without changing your financial situation.

The mortgage you choose when refinancing depends on several factors. How long do you plan on keeping your mortgage and what do you need from the new loan? If you only plan on keeping your home for a short while you’ll have more options; however, the longer you plan on keeping your home the better your opportunity to save money when refining.

Get a Lower Mortgage Rate

There are a number of ways to qualify for a lower mortgage rate when refinancing your home loan. You can do this for yourself by choosing an Adjustable Rate Mortgage, refinancing your subprime mortgage with a conforming loan, consolidating your home equity or second mortgage, or simply finding a better mortgage that doesn’t include commission based markup of the mortgage rate.

Lower Your Mortgage Payment

You can temporarily lower your mortgage payment by choosing an interest only loan or do so permanently by extending the term length of your new loan. Traditional mortgage loans have a term length of 30 years; however, there are now mortgages available with 40 year terms. If you are a senior citizen consider a reverse mortgage to generate income or free up cash for other bills.

Mortgage Refinancing Emergency

If you’re a homeowner who is underwater in your existing mortgage or can no longer afford your monthly payment due to your ARM resetting, you could benefit from FHA bailout programs. Your existing lender might need to agree to a modification or deferment to allow you time to catch up; however, help is available.

You can learn more about refinancing your home mortgage loan without overpaying or making an expensive mistake by registering for my Underground Mortgage Videos. Register today and you’ll learn how to refinance without paying commission based markup or lender junk fees and save thousands of dollars in the process.

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Are you in the process of refinancing your home mortgage loan and are searching the Internet for the best refinance interest rate?

You might not know something about the mortgage rate quotes you find online; something that could wind up costing you thousands of dollars. Here are several tips to help you find the best refinance interest rate and save yourself thousands of dollars in the process.

Best Refinance Interest Rate

What is the best refinance interest rate? Is it the lowest mortgage rate you can find online or is it the lowest rate that doesn’t include junk fees or markup to give the broker a commission? Did you know that mortgage brokers mark up mortgage rate quotes to get a commission from the lender while charging you a fee for originating the loan? This fee paid by the lender will often double, even triple your mortgage broker’s commission for arranging your loan. Does the mortgage broker arranging your loan deserve to make that much money from your loan? If the lender’s paying this extra fee to the broker why should you care?

It’s not the fact the lender pays this fee to your mortgage broker that should concern you; it’s why the lender is shelling out so much money that should worry you when refinancing your home loan. Why do mortgage lenders reward brokers for closing loans with higher than necessary mortgage rates? You might think that after closing on the loan your mortgage lender sits back and collects interest from your mortgage payments. That’s how they make their money right? In most cases, no that’s not how mortgage lenders profit from your loan. In fact, mortgage lenders make the majority of their profits by selling your loan to investors on the secondary market. Someone else services the loan and profits from your mortgage interest; in most cases it’s not the lender that you started with when refinancing.

What does all this mortgage mumbo jumbo mean for you? Mortgage lenders know that home loans with higher than market mortgage rates bring them a premium profit when sold to investors; this is why they reward mortgage brokers for locking and closing your home loan with a higher than necessary interest rate. This fee paid to your mortgage broker for overcharging you has a technical mortgage mumbo jumbo title and is called Yield Spread Premium by those in the business. If you want the best refinance interest rate for your next home loan you simply must avoid any and all Yield Spread Premium on your loan.

You Don’t Have to be a Financial Guru

Many homeowners are intimidated by the process of negotiating with a mortgage broker. You don’t have to be a financial guru to pull off refinancing your home loan with a mortgage rate that hasn’t been marked up to give the broker a commission… you just need to find the right broker. My Underground Mortgage Videos will show you exactly how to find and negotiate with the right mortgage broker to get the best refinance interest rate for your home.

You know finding the lowest mortgage rate when refinancing is important because the higher your mortgage rate, the higher your monthly payment will be. Here is an example to illustrate how this unnecessary markup of your interest rate by the mortgage broker drives up your monthly payment.

Suppose for example you are a California homeowner refinancing for $375,000. Your mortgage broker quotes you an interest rate of 5.75% and charges you an origination fee of 2.5%. This origination fee will cost you a whopping $9,375 at closing. Again, follow the RefiAdvisor system outlined in my Underground Mortgage Videos and you’ll find a mortgage broker willing to refinance your loan for a flat one percent origination fee saving yourself $5,625 in origination fees alone…. you should really register for these mortgage videos.

What about that mortgage rate of 5.75%? What your mortgage broker isn’t telling you and you’ll probably never find on your Good Faith Estimate is that the lender actually approved you for a mortgage rate of 5.25%; however, your broker marked it up to get that commission from the lender. Your lender pays the broker a commission of one point for every .25% they markup your mortgage rate. Remember that one point is defined as one percent of your mortgage loan amount. In this case the broker gets two points, or two percent of your loan amount for locking and closing your home loan with a higher than necessary mortgage rate. This is Yield Spread Premium on your home loan.

What does Yield Spread Premium do to your monthly mortgage payment? Spend a few minutes with a mortgage calculator and see for yourself. In this example on a 30 year, fixed rate mortgage at 5.75% your monthly payment will be $2,190. Had you gotten the mortgage rate you deserve at 5.25% your monthly payment would have been only $2,070. That’s a savings of $1,440 per year! Still not convinced that you need my Underground Mortgage Videos? In this example these mortgage videos would save you $7,065 the first year alone!

You can learn more about getting the Best Refinance Interest Rate without unnecessary markup to give your mortgage broker a commission by registering for my Underground Mortgage Videos. Register today and you’ll have immediate online access to the mortgage videos without downloading anything to your PC.

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Are you considering refinancing your home mortgage loan with your bank or credit union?

There are several good reasons for considering taking out a new mortgage loan from your bank; however, there is one glaring problem with bank originated mortgage loans. Should banks do mortgages?

The following discussion about your bank’s dirty little secret could save you thousands of dollars on your next mortgage loan.

Should Banks do Mortgages?

What could be more convenient than making an online transfer from your checking account to your mortgage loan? Click, click…done. If you’re at that stage in your relationship with your bank and your mortgage loan you’ve probably already paid too much. Here’s why.

Real Estate Settlement Procedures Act

Also known as RESPA, the Real Estate Settlement Procedures Act is a very important bit of legislation that protects homeowners in the United States from predatory lending practices. Except for one not so small problem: the Banking Lobby spent millions of dollars lobbying Congress to have the laws changed so that your banks and credit unions are exempt from having to disclose their markup and profit margins from your home loan…and they pulled it off.

Service Release Premium

If you’ve spent any amount of time reading the mortgage articles on this site or watching the underground mortgage videos available on this website, you’re already familiar with Yield Spread Premium. For the uninitiated, Yield Spread Premium is a kickback that lenders pay to your mortgage broker for locking and closing your mortgage loan with a higher than necessary mortgage rate. Think of it as a commission paid to your mortgage broker for overcharging you.

Banks don’t use mortgage brokers to originate their home loans because they fund their loans with the banks money, cutting out the middleman so to speak. This is a good thing right? No mortgage broker, no Yield Spread Premium right? Not exactly. ..

Banks don’t offer wholesale mortgage rates to their customers, but they know what rates are available from wholesale lenders including what mortgage rate you could get from their competitors; however, the bank charges you mortgage rates based on what profit they want to make selling your loan on the secondary market. This markup of what you could have had and what you got creates Service Release Premium, or a premium profit for the bank.

The bank will never tell you what they’re doing with your mortgage rate because they’re not legally required to disclose any of this about your loan. Remember that loophole in the Real Estate Settlement Procedures Act? In a nutshell, this is why you should never refinance your home mortgage with your bank.

Mortgage Broker Banks

The successful lobbying of Congress to have banks excluded from RESPA legislation created a new kind of “direct lender.” Many mortgage brokers saw what the banks had accomplished for themselves and greedily decided they wanted in on the action. These brokers created a new kind of lender known as a “broker bank.” Instead of reselling loans from wholesale lenders these broker banks funded loans with their own cash and were therefore able to take advantage of the same loophole as your bank. You’ll see advertisements now and then for “direct lenders” that cut out the middleman when refinancing your mortgage.

Don’t be fooled by this bravado; the only reason for a mortgage broker to operate a business in this manner is to take advantage of their customers by exploiting this loophole in disclosure laws that are supposed to be protecting you from predatory lending practices.

How to Spot a Mortgage Broker Bank

How can you tell if the person you’re dealing with is operating as a broker bank? Ask them if they close in the name of their own company or the wholesale lender when refinancing your mortgage. If the answer is that they close in their own company’s name then you know that you’re dealing with a mortgage broker bank and would be better off finding someone else to refinance your home.

You can learn more about refinancing your mortgage with the right lender without paying this unnecessary markup of your mortgage rate or lender junk fees by registering for my Underground Mortgage Videos. Register today and you’ll be on your way to saving thousands of dollars on your next home mortgage loan.

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If you’re in the market for a new home loan you’re probably searching the Internet for Best Mortgage Refinance Rates. There are a couple things you might not know about the rate quotes you find on the Internet that could hurt you when refinancing.

Did you know that 98% of all mortgage quotes you find online have someone’s commission built into them? These quotes could wind up costing you thousands of dollars unnecessarily without you even knowing it. Here are several tips to help you avoid these hidden mortgage rate commissions and get the best mortgage refinance rates for your next home loan.

Best Mortgage Refinance Rates

What are the best mortgage rates when refinancing your home loan? Could you spot a par mortgage rate if you found one? Do you know what a par mortgage rate is? Here’s the simple definition of a par mortgage rate: it’s one that does not cost money for you or create money for the person arranging your loan. That’s the secret your mortgage broker doesn’t what you to know about.

What do I mean by a mortgage rate that doesn’t costs money to get? That’s easy, you’ve heard of discount points right? Discount points are a fee you have to pay at closing to get a specific mortgage rate. One point is usually one percent of your loan amount. A par mortgage rate does not require that you pay any discount points to qualify…that’s a good thing. What about creating money? That’s the hidden commission you’ve probably not heard of. Did you know that your mortgage broker earns a commission from the lender for marking up your mortgage rate? This hidden commission could easily result in your overpaying thousands of dollars every single year you keep your loan.

Hidden Mortgage Broker Commissions

Your mortgage broker is compensated for their work in two ways. The broker can charge you a fee known as a loan origination fee. This fee is usually disclosed up front and can be found on your Good Faith Estimate. A reasonable amount to pay for loan origination is one point, or 1% of your mortgage amount; however, many greedy brokers charge as much as 3-5% of your loan amount. You should never agree to pay this much for a broker’s services…in fact, if you follow the RefiAdvisor system outlined in my Underground Mortgage Videos you can easily find a mortgage broker willing to work for a one percent origination fee.

So what about this hidden commission? It’s called Yield Spread Premium and is single handedly responsible for American homeowners overpaying sixteen billion dollars this year alone according to the US Department of Housing and Urban Development.

What Is Yield Spread Premium?

Yield Spread Premium is a hidden commission created for your mortgage broker when they lock and close your new mortgage loan with a higher than necessary mortgage rate. Higher than necessary means they mark up the mortgage rate your lender approved you to get a commission from that lender…it’s really that simple. Most mortgage brokers will not talk about Yield Spread Premium and leave it off the Good Faith Estimate completely. Many mortgage brokers become defensive, even angry when you question them about Yield Spread Premium, and why wouldn’t they…

This hidden commission often doubles, even triples their compensation for arranging your home loan. You might be asking yourself why Yield Spread Premium is a problem…the fee isn’t coming out of your pocket, the lender pays it right? While it’s true that the lender is paying Yield Spread Premium, you need to consider why the lender is paying your broker to mark up your mortgage rate.

Banks and mortgage lenders make the majority of their profits selling their loans to investors. That’s right, banks are part of the problem here too…you cannot avoid Yield Spread Premium simply by refinancing your home loan with a bank to cut out the mortgage broker. Banks are just as guilty of ripping people off as the dirtiest mortgage broker out there; however, due to a little known loophole in the Real Estate Settlement Procedures Act it’s perfectly legal for your bank to rip you off AND they don’t even have to disclose what they’re doing. Perfectly legal and perfectly sleazy…if you refinance your home mortgage with a bank or credit union you will overpay…guaranteed.

So how do you get the best mortgage refinance rates? You simply have to find the right mortgage broker willing to work for a one percent origination fee without taking Yield Spread Premium on the loan. This isn’t as difficult as you might think and you don’t have to be a financial guru to pull it off. In fact, if you have one hour to invest with the underground mortgage videos on this website, you’ll learn everything you need to know and have the tools you need to pull it off in one place.

Still Not Convinced?

Once you find the right mortgage broker you’ll have access to Par Mortgage Refinance Rates and will save thousands of dollars every year that you keep the loan. Still not convinced? Here’s an example to illustrate how this hidden commission known as Yield Spread Premium drives up your mortgage payment unnecessarily. Suppose for example you are refinancing your California mortgage loan for $350,000. Your mortgage broker quotes you a rate of 5.75% and charges an origination fee of two points. Remember, one point is one percent of your loan amount…in this example the origination fee is two percent, or $7,000.

Two percent is double what you could have paid had you signed up for my underground mortgage videos, but not registering today won’t be the first mistake you make on this loan. Take a look at that mortgage rate your broker quoted you…what you don’t know is that the lender actually approved you for a mortgage rate of 5.25% but the broker marked it up to 5.75% to get a commission from the lender. In this example the lender pays a commission of 2 points, or an additional $7,000 to the broker for marking up your mortgage rate, doubling the mortgage broker’s commission on your loan.

What does the lender get for their money? You agree to a loan that is .50% higher than it needed to be…big deal, half a percent isn’t that much right? Let’s take a look at what .5% does to your mortgage payment. Your monthly payment on a 30 year, fixed rate mortgage at 5.75% would be about $2,053 per month. If you had only watched my Underground Mortgage Videos and got the mortgage rate you deserve at 5.25% your mortgage payment would only be $1,930…that’s a difference of $1,476 you’re throwing away every year!

If only you’d have registered for my Underground Mortgage Videos you’d have saved yourself $7,380 after five years…

You can learn more about finding the best mortgage refinance rates that don’t have this hidden commission known as Yield Spread Premium or lender junk fees by registering for my Underground Mortgage Videos available on this website.

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Many homeowners absolutely dread refinancing their mortgage loans because they don’t fully understand how the Origination Fee and Points work.

In fact, the Origination Fee and Points are one of the reasons homeowners in the United States will overpay well over sixteen billion dollars this year alone when refinancing their mortgage loans according to the HUD Secretary. Here are several tips to help you avoid being a part of this statistic when refinancing your home loan AND save you thousands of dollars in the process.

Origination Fee and Points

Let’s get started with the origination fee. Sometimes called “origination points” this a fee you will pay to the person arranging your new loan. This person could be a mortgage company or broker. A reasonable amount to pay for loan origination is one percent of your loan amount; however, it is not uncommon for mortgage brokers to charge as much as five percent. If you follow the system outlined in the underground mortgage videos on this website you can find a broker willing to work for one percent without padding your mortgage rate for a commission…but more on that later.

What About Discount Points

There is another flavor of mortgage points you need to be aware of and that is the so called “discount points.” This is a form of pre-paid interest paid by you at closing in exchange for lowering your mortgage rate. One “discount” point is the equivalent of one percent of your mortgage amount and should lower your mortgage rate by .25%. Some lenders will require you to pay points to get a specific mortgage rate; however, in today’s market you can get rock bottom mortgage rates without paying discount points.

If you have less than desirable credit you might not be able to get around paying points…whether or not it makes sense to refinance in your case depends on how long it will take to recoup your points and closing costs from your savings on the new loan. You can easily calculate the breakeven point when refinancing by determining how much lower your new mortgage payment will be each month and dividing your total closing costs including points by the amount of your savings. This will tell you how many months it will take to recoup your expenses from refinancing; if you can live with the length of time it takes to get your money back then refinancing your mortgage probably makes sense in your situation.

This is a much more intelligent method of determining if refinancing is a good idea in your situation than relying on that old wife’s tale known as the two percent rule. (The two percent rule states you should only refinance if your new mortgage rate is two percent lower than you existing rate. A real bone head came up with this rule…you’d never want to be seen with him and he’d embarrass you at parties.) Getting back to points in most cases you will want to avoid paying discount points whenever possible because mortgage rates are so low right now.

What About Mortgage Broker Markup?

That’s the million dollar question…what about all these sneaky mortgage brokers that mark your interest rate up to get a commission from the lender? I’ll bet you didn’t know they did that? In fact, many brokers become defensive and angry if you ask them about this markup, insisting that the fee they receive from the lender is “none of your business…it’s between me and the lender.”

Well, I’m here to tell you that this “fee” known as Yield Spread Premium is your business and you should be very concerned as to why the lender pays the broker for marking up your mortgage rate. Mortgage lenders love loans that close with higher than market mortgage rates. Your lender actually makes the majority of their profits selling loans to investors on the secondary mortgage market and home loans with higher than necessary mortgage rates make them the most profit. This is why mortgage lenders reward brokers that overcharge their customers with a commission known as Yield Spread Premium.

Most homeowners have never heard of this markup and don’t know how to spot it in their loan documents. You’ll probably never see it on your Good Faith Estimate because many brokers leave it off completely. The lender is required by law to disclose it in the HUD-1 statement; however, if you don’t know what you’re looking for at this point it’s probably too late and you’ve already paid too much.

Better luck next time around right? Well, fortunately for you, you’re probably not that far along in the closing process and have time to learn how to avoid this unnecessary markup of your mortgage rate that results in overpaying thousands of dollars every year that you keep the mortgage loan. Another little known fact when refinancing your home mortgage loan is that you actually have three days to change your mind and put the brakes on before your lender funds the loan. This is known as your three day rescission rights…you can bail on a shady lender at any time until your loan is funded three business days after closing.

How to Avoid Overpaying the Origination Fee and Points

You might be thinking to yourself I know how to avoid all this mortgage broker trickery…I’ll just refinance my home loan with my bank or credit union. Guess again, banks have their own tricks due to a little known loophole in the Real Estate Settlement Procedures Act. Refinance your home loan with a bank and I guarantee you’ll pay more than you have to AND will never know how the bank overcharged you. The best way to refinance your mortgage without overpaying is to find the right mortgage broker for the job.

Your Mortgage broker works for a commission, you’ll never get around this and they do have kids to feed like everyone else; however, they should not be taking advantage of people just to make a hummer payment. There are honest mortgage brokers out there who are willing to work for a one percent loan origination fee without taking Yield Spread Premium on the loan; you just need to know how to find them.

You can learn more about refinancing your mortgage without overpaying the origination fee and points with my Underground Mortgage Videos. Check out my free videos today and you’ll learn how to refinace without paying Yield Spread Premium or lender junk fees without downloading anything to your computer’s hard drive.

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Are you in the market to refinance your existing mortgage loan? Do you find terms like APR, Mortgage Rate, and Points confusing and misleading?

You’re not alone…most homeowners never fully understand what the Annual Percentage Rate is or how points affect their mortgage rate and closing costs. Here are several tips to help demystify mortgage loans and save you thousands of dollars when refinancing your home loan.

Annual Percentage Rate

You’ll see it listed as APR for short…but what is Annual Percentage Rate really? The Truth in Lending Act of 1974 requires lenders to disclose the costs of a loan to allow homeowners to compare loan offers. This law was supposed to make it easy to make apples to apples comparisons of any mortgage offer you’re considering; however, the problem you’ll find when comparing one apple to another is that your lender could just as easily hand you a mango that they’ve designated an apple. Here’s why.

Annual Percentage Rate is an expression of the total costs you’ll pay every year as a percentage of the loan amount. The law requires mortgage lenders to tell you what the APR is; however, there is no standard for lenders to calculate the APR or requirements that all fees and charges be listed. This means that every lender you encounter when refinancing your mortgage will have a different way of calculating the APR and may only include the lenders fees, not your broker’s origination fees and markup.

APR is a Marketing Tool

These days the Annual Percentage Rate is largely a marketing tool designed to get you into the office or on the phone to generate a lead. Most of the numbers you see are purely fictional and should not be relied on when choosing a mortgage loan. How should you compare loan offers? Shopping for a mortgage correctly isn’t a matter of comparing loan offers like you would compare a bottle of Ketchup at the grocery store. Instead of trying to find the right lender or loan, concentrate your efforts on finding the right person to arrange you mortgage and the rest will fall into place.

How to Find the Right Mortgage Broker

Finding the right mortgage broker when refinancing your home loan is easier than you think. If you look in the phone book you’ll find a lot of fancy mortgage brokers with posh offices and company hummers decked out with their company logos. Think these folks are the right people to originate your loan? Think again. Posh offices, expensive sales staff, receptionists, cappuccino makers, and company hummers cost a lot of money. These mortgage brokers have huge overhead costs to keep their businesses afloat and have minimum targets they need to bring in on each loan.

This means because of their overhead costs these mortgage brokers will never be willing or able to negotiate their origination fees or Yield Spread Premium on your loan. It’s your money but these broker’s think they’re entitled to it…someone’s gotta make that hummer payment right?

How do you find the right mortgage broker to refinance your home loan? Look for a small, self-employed mortgage broker that has been in the business for ten years or longer. Does this broker work out of their home? Even better…less overhead means these mortgage brokers will be willing and able to negotiate for your business.

You can learn more about finding the right broker to refinance your home loan without paying commission based markup of your mortgage rate or junk fees by registering for my Underground Mortgage Videos available on this website.

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Are you considering taking out a new mortgage to refinance your existing home loan?

If you’re seeking advice online to help you find the best loan with the lowest possible mortgage rate there are a number of things you need to know in order to avoid paying too much when refinancing.

Here are several mortgage tips to help you avoid a costly mistake when refinancing your home mortgage loan.

Mortgage Advice Today

Ever hear of Yield Spread Premium? Don’t feel bad if you haven’t… 90 percent of homeowners in the United States have no idea how this unnecessary markup of their mortgage rate drives their payment up costing them thousands of dollars every year. What is Yield Spread Premium? In the simplest terms it is a commission created for the person arranging your mortgage for locking and closing your loan with a higher than market mortgage rate. That’s right, mortgage lenders reward brokers that overcharge their customers with a commission.

How does Yield Spread Premium work? Suppose you are refinancing your $230,000 home and your broker quotes you a mortgage rate of 6.5%. The broker waives their origination fee stating that their fee is “being paid by the lender so it’s not costing you anything.” What a great deal right? What a load of crap. First of all, think about it… Why would the mortgage lender pay the broker’s origination fee unless there was something in it for them?

The truth is there is something in it for the lender. Mortgage lenders make the majority of their profits selling their loans to investors on the secondary mortgage market. Home loans with higher than market mortgage rates bring in premium profits for the lender, more than making up for the chump change they throw at the broker for overcharging you. Now that you know why lenders pay mortgage brokers for originating loans with higher than market rates let’s get back to our $230,000 example.

Your broker quoted you a mortgage rate of 6.5% on a $230,000 thirty-year, fixed rate mortgage. What you don’t know because most brokers will not tell you and often become angry and defensive if you ask them, is that you actually qualified for a 6.0% but they’ve marked your rate up to get Yield Spread Premium from the lender. For every .25% your broker marks up your mortgage rate they receive a commission from the lender of 1.0% of your loan amount. In this example the broker gets 2%, a commission of $4,600…which is double what they should be getting for arranging your loan.

So what’s the big deal with Yield Spread Premium? That $4,600 isn’t coming out of your pocket so why should you worry about it? Take a look at what that extra .5 percent you’re paying does to your monthly mortgage payment. If you had closed with the mortgage rate you deserve at 6.0% your payment on a $230,000 thirty-year, fixed rate mortgage would be about $1,370 per month. Since you agreed to overpay for your mortgage loan your payment for the same loan at 6.5% will be $1455. That’s $1,020 you’re throwing away every year because you paid too much when refinancing.

Mortgage Refinancing With a Bank

You might be saying to yourself “If mortgage brokers are so sleazy I’ll just avoid all this unfortunate Yield Spread Premium business by refinancing with my bank.” This sounds like a good idea; however, banks are just as guilty of ripping people off and twice as sleazy. Here’s why:

The Real Estate Settlement Procedures Act

Called RESPA for short is a bit of legislation in the United States that requires mortgage brokers to disclose their markup and profit margins on your home loan. Sounds good right? The problem with RESPA laws as they are on the books now is that banks and credit unions are exempt from these disclosure laws. Your bank is not required to tell you how much they’ve marked up your rate to make a profit selling your loan on the secondary market or how much profit they’re making for that matter. This markup of your bank or credit union for fun and profit goes by a slightly different name; it’s called Service Release Premium.

Where Do You Go From Here?

You’ve learned that your bank or credit union is a bad place to refinance your home and mortgage brokers cannot be trusted…so where does that leave you? It’s not a question of if you should use a mortgage broker when refinancing but which mortgage broker. You see brokers have access to wholesale mortgage rates and give you deals that your bank and credit unions will never allow… you just need to know how to find the right mortgage broker for the job.

Fortunately for you, finding the right mortgage broker to refinance your home loan is easier than you think. You can learn more about refinancing your home with the lowest possible mortgage rate while avoiding junk fees by registering for my underground mortgage videos. Register today for immediate online access from your PC and you’ll be on your way to saving thousands of dollars on your next mortgage loan.

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I’ve been getting a lot of questions lately about “Par” mortgage rates when refinancing. Most people haven’t heard of par mortgage rates and don’t know what they are; others have heard of par when their mortgage broker name drops “par” to make them think they’re getting a great deal. What are par mortgage rates? Should you care and how can you get them?

Read on my friend…here are several tips to help save you thousands of dollars on your next mortgage loan.

Mortgage Rates Refinance

So you’ve decided to refinance your mortgage loan. Rates are low right now and lenders are desperate…no time like the present to refinance your home loan right? Refinancing right now can get you a good deal because rates are low; however, if you want the best deal available right now for your money there are several things you need to know to avoid overpaying.

What Are Par Mortgage Rates?

A par mortgage rate is simply one that does not cost you money nor create a commission for the person arranging you loan. That means you don’t have to pay points to get the mortgage rate and there is no Yield Spread Premium created for the broker. (More on Yield Spread Premium later) Some mortgage brokers will tell you that you have to pay points to get a par rate; If you for this your hard earned cash will go right into your mortgage broker’s pocket.

You’re probably already familiar with the concept of paying points to lower your mortgage rate; however, what you might not know is that your broker creates a cash commission by raising your mortgage rate, often without telling you. This markup of your mortgage rate for a commission is called Yield Spread Premium and is a cash percentage of your loan amount created for the mortgage broker when you lock and close your mortgage with a higher than necessary interest rate.

The problem with Yield Spread Premium is that while your mortgage broker is required by law (Real Estate Settlement Procedures Act) to disclose the fee they receive for inflating your mortgage rate, they all have clever ways of disguising the fee and frequently leave it off your Good Faith Estimate. How much of a problem is Yield Spread Premium? If the fee is paid by the mortgage lender and doesn’t come out of your pocket, do you really need to worry about it? The problem with Yield Spread Premium is not that the lender pays the fee, but the reason mortgage lenders reward brokers for closing loans with higher than necessary mortgage rates.

Here’s an example to illustrate what a higher than necessary mortgage rate does to your monthly payment amount. Suppose you are refinancing your home for $250,000. Your mortgage broker quotes you a rate of 6.5% and waives their fee for loan origination. No origination fee? That’s gotta be a great deal right?

What you don’t know about this loan is that you were actually approved for a mortgage rate of 6.0% and the broker marked it up to 6.5% for a commission of 2% of your loan amount. That’s an outlandish amount for the mortgage broker’s commission; except for the fact that they were waiving their fee.

Here’s what’s wrong with this mortgage loan: Your monthly payment amount with a 6.5% mortgage rate will be $1580 per month. If you had the mortgage rate you deserved at 6.0% your monthly payment would only be $1490 per month…that’s $1080 you’re overpaying every year! What could you do with a thousand bucks savings on your mortgage payment? I’m sure you know the answer to that…

You Can Get Par Mortgage Rates

Refinancing your home loan with a mortgage rate that does not require points or includes commission based markup is easier than you think. Once you understand how the mortgage rates refinance game works you can avoid markup and junk fees. The mortgage videos on this website will show you how to do this and save thousands of dollars on your next mortgage loan…register today for immediate access on your PC.

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Are you in the market to refinance your home mortgage and are searching for today’s mortgage rates? Before you do anything there are several things you need to know about the mortgage rate quotes you receive.

Things are not as bad as you have been hearing in the news; however, it is very easy to overpay when refinancing your mortgage. Almost every mortgage quote you come across has someone’s commission built into it. If you’re looking for today’s real mortgage rates for refinancing your home loan here are several tips to help you get a good deal.

Today’s Mortgage Rates Refinancing

If you’re new to this business of mortgage refinancing, the process isn’t much different from what you went through when you purchased your home. You’ll need to find someone to arrange your mortgage for you, usually a mortgage broker that will charge you a fee for their services. Many homeowners think they can skip the middleman by going to their bank for a mortgage loan; however, what the bank isn’t obligated to tell you thanks to a loophole in the Real Estate Settlement Procedures Act is that they are charging you the same markup that most mortgage brokers charge, and probably even more.

How to Find the Right Mortgage Broker

If you want the best deal for your next mortgage loan you’ll need to find a mortgage broker to arrange the loan for you, and not just any broker. Because mortgage brokers work for a commission you don’t want the mortgage broker with the posh office and company hummer. I mean really, how do you think they’re paying for all that bling? They pay for it by overcharging their customer’s mortgage rate…but more on that later.

If you want the best deal the right mortgage broker for your job is a small time self-employed professional, even one working out of their home. These mortgage brokers don’t have the overhead that comes with posh offices and expensive sales staff…not to mention the company hummer plastered with their logo and website.

Mortgage Junk to Avoid

Why do the majority of people overpay when refinancing their mortgages? Simply because they don’t understand how the broker is paid and think that if the lender is paying the fee it’s not coming out of their pocket. Many brokers brag about the fact that their compensation is coming from the lender and even waive their origination fee when refinancing…if anyone who works for a commission starts waiving fees pay very close attention to what they’re shoveling.

What you need to know is not the fact that the mortgage lender is paying this fee for you but why they are paying a fee. Lenders reward mortgage brokers that lock and close loans with above market mortgage rates. If your mortgage broker is receiving a fee from the lender when refinancing it’s because you’re paying a higher mortgage rate than you need to, not that your broker is the “best in the business.” What a load of crap…

It is possible to refinance your home mortgage with a wholesale mortgage rate paying only a one percent origination fee to the mortgage broker. You can find honest mortgage brokers licensed to work in your state that do not mark up mortgage rates for a commission.

You can learn more about refinancing your home mortgage without paying too much by checking out my Underground Mortgage Videos.

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Considering mortgage refinancing this year? Worried about paying too much or taking out the wrong type of loan when refinancing?

It’s true that mortgage refinancing can save you thousands of dollars by lowering your monthly payment amount; however, there are a number of pitfalls that result in paying too much for your new home loan.

There is mortgage help for homeowners that will allow you to refinance without paying markup of your interest rate or junk fees to the broker or lender. Here are several tips to get you on the right track to saving thousands of dollars on your next mortgage loan.

Mortgage Help for Homeowners

If you’re refinancing your home mortgage loan there are several ways to overpay when taking out the new loan. Most of the junk fees and markup you will encounter come from the person arranging your mortgage and can be avoided if you find the right person to work with. Who is the right person to refinance your home mortgage loan? I’ll get to that in a minute but first I’ll tell you who it’s not…your bank or credit union. Many people think taking out a mortgage with your bank is the most convenient way of refinancing; while it’s true banks make it easy to take out a mortgage you are guaranteed to overpay with any bank or credit union and here’s why:

Real Estate Settlement Procedures Act

There is a bit of legislation in the United States called the Real Estate Settlement Procedures Act that protects homeowners from abusive lending practices by requiring mortgage brokers to disclose their markup and profit margins on your home loan. Sounds great right? There’s just one problem with fair lending laws in the United States, your bank and credit union are exempt from them when it comes to mortgage loans. That’s right; the Banking Lobby spent millions of dollars romancing Congress to be exempt from this legislation and succeeded in getting the laws changed so that your bank is exempt from RESPA legislation.

Because of this loophole in the Real Estate Settlement Procedures Act your bank or credit union is not required to tell you how much they’ve marked up your mortgage rate or how much profit they’re making off your home loan. If you refinance your mortgage with your bank you will pay too much…period.

Mortgage Broker Tricks

Now that you know banks are a bad idea for refinancing your home mortgage loan I should tell you that mortgage brokers aren’t much better as a whole. This doesn’t mean that you can’t find honest brokers to work with it just means you have to stay on your toes when shopping for the right broker to refinance your mortgage. Mortgage brokers are not exempt from RESPA legislation like your bank; however, they do have clever ways of disguising their markup and junk fees. Learn how to recognize mortgage broker tricks and you’ll be able to find an honest mortgage broker and save yourself thousands of dollars on your next home loan.

Mortgage Rate Markup

So what is this markup of your mortgage rate anyhow? Simply put your broker marks up your mortgage rate because the lender pays them a commission for locking and closing your loan with a higher than necessary mortgage rate. This fee is known as Yield Spread Premium and according to the government is responsible for homeowners in the United States overpaying sixteen billion dollars this year alone. How do you recognize Yield Spread Premium when refinancing your home mortgage loan? You won’t typically find it listed on your Good Faith Estimate because this document is little more than a marketing tool used to sell loans.

Your first opportunity to spot Yield Spread Premium when refinancing your home is when you lock in your mortgage rate and receive written confirmation from the lender. This confirmation must come from the lender and not your mortgage broker. Many dishonest mortgage brokers type up a rate lock confirmation on their company letterhead and try and pass it off as the lenders; if your mortgage broker does this they are simply trying to hide their markup of your mortgage rate. Many mortgage brokers will simply refuse to show you rate lock confirmation from the lender stating that the information is “proprietary” or “confidential” and that you cannot see it. Again, this is your broker’s boneheaded attempt to hide what they’ve done to your mortgage rate for a commission from the lender.

Why do mortgage lenders pay the broker a bonus for marking up your mortgage rate? Mortgage lenders make the majority of their profits by selling your loan to investors on the secondary market. Lenders know that mortgage loans with above market mortgage rates bring in premium profits. This is why the lender rewards mortgage brokers that overcharge their profits with Yield Spread Premium, often doubling, even tripling their commissions.

You Don’t Have to Overpay for Your Next Mortgage

Ignorance might be blissful but when it comes to your mortgage loan bliss will cost you thousands of dollars in unnecessary mortgage interest. Fortunately, avoiding this unnecessary markup of your mortgage interest rate is easier than you think. You simply have to find the right mortgage broker to refinance your home loan. It is possible to refinance your mortgage paying only a one percent origination fee without Yield Spread Premium from the lender. The trick is finding the right mortgage broker for the job.

How to Find the Right Mortgage Broker

What kind of car does your mortgage broker drive? Is it a Hummer H3 plastered with their company’s logo? I guarantee this broker is not the right person for the job. The ideal mortgage broker is a small time, self-employed broker that does not employ an expensive sales staff or posh office spaces. They most certainly do not drive a company Hummer. Find a self employed mortgage broker that works out of their home? Better Still. These self-employed mortgage brokers will not have the overhead expenses and will be much more likely to cut you a deal that does not include commission based markup of your mortgage rate.

You can learn more about refinancing your mortgage loan without paying junk fees to the lender or broker by registering for the videos found on this website. Register today and you’ll have immediate, online access to the videos and training materials that will show you step-by-step how to get the best deal on your next home loan.

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If you are considering refinancing your home mortgage loan you might be concerned about refi problems that can arise during the closing process. There are a number of junk fees and markup that can turn that new mortgage loan you’re applying for into an expensive mistake. Here are several tips to help you avoid Refi Problems that result in overpaying for your next mortgage loan.

Refi Problems

Most homeowners have no idea how the person arranging their mortgage is compensated for their work. Assuming you will not be refinancing your mortgage with a bank due to loopholes in the Real Estate Settlement Procedures Act which allows the bank to overcharge without telling you, the next mortgage you have will be arranged by a mortgage broker.

Mortgage brokers are paid for their work by two sources. Brokers can charge you a loan origination fee, often as much as five percent, which you will pay at closing for their part in arranging the loan. One percent is a reasonable amount to pay for loan origination, so don’t be afraid to bring this up when shopping for a loan. The second way mortgage brokers are compensated is with a fee paid by the lenders in the form of Yield Spread Premium.

Mortgage Yield Spread Premium

Mortgage lenders pay a fee to the broker for locking and closing your loan with an above market mortgage rate. You might think this isn’t a problem because the fee is not coming out of your pocket but you need to consider why lenders pay this fee. Lenders reward mortgage brokers for closing loans with above market mortgage rates because these loans bring them a premium profit when the loans are sold to investors on the secondary market. What you need to know about higher than market mortgage rates is that they result in a higher than necessary mortgage payment, a payment you’ll be making every month that you keep your loan.

Here’s an example to illustrate how Yield Spread Premium drives up your mortgage payment unnecessarily. Suppose for example you are refinancing your California mortgage for $350,000. The broker quotes you a mortgage rate of 5.75% and charges you an origination fee of 2%. This means you’ll have to fork over seven thousand dollars at closing for the mortgage broker’s fee. What your broker isn’t telling you is that you actually qualified for a 5.0% mortgage rate and they’ve marked it up to get a commission from the lender.

You might be asking “What’s a measly .75% between friends?” Here’s what that .75% on your mortgage rate does to your monthly payment. Your monthly payment with a mortgage rate of 5.75% on a 30 year fixed rate loan will be $2050. If you had gotten the mortgage rate you qualified for at 5.0% your monthly mortgage payment would be only $1,875 per month! That’s a difference of $2,100 every year that you keep this loan! Still think Yield Spread Premium isn’t a Refi Problem you need to be worried about?

Yield Spread Premium Can Be Avoided

It is possible to refinance your home loan without Yield Spread Premium paying the mortgage broker a flat one percent origination fee for their work. Homeowners who know how to do this are able to take advantage of the wholesale nature of mortgage rates and save thousands of dollars in unnecessary mortgage interest every year. According to the HUD Secretary Yield Spread Premium will be responsible for American homeowners overpaying nearly sixteen billion dollars this year alone! Don’t be a part of this statistic…register for the mortgage refinancing tutorial on this website and you’ll learn how to refinance you home with a wholesale mortgage rate without paying junk fees to the lender or the broker.

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If you are in the process of refinancing your home mortgage and don’t want to overpay refinance fees when taking out a new loan, there are many junk fees you’ll need to avoid to ensure that you’re getting a good deal.

Most of the junk fees you’ll encounter when mortgage refinancing are from the person originating your loan and can be avoided if you know how. Here are several tips to insure you’re not overpaying refinance fees on your next mortgage loan.

Mortgage Loan Origination

What is mortgage loan origination anyhow? Can’t you just go to your bank or credit union and cut out the middleman when refinancing to get the best deal? You could go to your bank to refinance; however, because of a little known loophole in the Real Estate Settlement Procedures Act the bank can charge you the same fees you’ll pay with a mortgage broker and doesn’t even have to disclose them to you. That’s right, banks are the worst deal in mortgage loans thanks to the Banking Lobby which spent millions of dollars lobbying congress to be exempt from disclosure laws that protect homeowners from predatory lending practices.

Mortgage Broker Fees

Since banks are out of the picture due to unfair lending practices, the best option for your next mortgage loan is use a mortgage broker to arrange your loan for you. You don’t want just any mortgage broker since dishonest brokers pad their commissions with junk fees and mortgage rate markup; you’ll need to find an honest broke willing to work for a one percent origination fee…more on this later.

The first thing you need to know about refinance fees is that mortgage loans are retail products. The person arranging your loan is simply reselling loans from a wholesale lender for a commission. This commission comes from two sources: you and the mortgage lender. You’ll pay for mortgage loan origination by paying a flat origination fee. Ideally loan origination fees should only be one percent of your loan amount, which isn’t hard to negotiate; however, many mortgage brokers charge anywhere from two to five percent so you’ll want to be careful with this fee.

Yield Spread Premium

The second way mortgage brokers get a commission for their work is form the lender. Mortgage lenders pay a commission to the broker for locking and closing your loan with a higher than necessary interest rate. This markup of your mortgage rate creates a cash bonus for the broker for overcharging your and is known as Yield Spread Premium. If you want a good deal on your next mortgage loan you MUST avoid Yield Spread Premium or you’ll be thousands of dollars too much for as long as you keep the loan.

Yield Spread Premium sounds scary and most homeowners have never heard of the term however, like other mortgage garbage fees it’s not hard to avoid. When you negotiate a flat one percent origination fee without Yield Spread Premium you’ll be taking advantage of wholesale mortgage rates and saving thousands of dollars in mortgage interest. The mortgage videos on this website show you exactly how to do this in an easy to follow, step-by-step guide.

Junk Refinance Fees

There are a number of other refinance fees you’ll need to avoid that are pure garbage. If for instance your mortgage broker charges you a rate lock fee you’re probably dealing with a dishonest mortgage broker. There isn’t one single mortgage lender in the country that charges a fee for locking in your mortgage rate…this fee is pure garbage and headed right into your mortgage broker’s pocket if you agree to pay it. Other garbage refinance fees you should be on the lookout for include broker courier fees and loan processing fees.

You can learn more about refinance fees you need to avoid including strategies for refinancing your home loan with a wholesale mortgage rate by registering for my Underground Mortgage Videos available on this website. You’ll get immediate online access to the mortgage videos and all refinancing materials in our password protected member’s area.

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If you are a Wells Fargo customer and are considering refinancing your home mortgage with Wells Fargo mortgage there are several things you should know before making an informed decision about your next home loan. Wells Fargo Mortgage is the second largest mortgage lender in the United States after Countrywide; however, does bigger necessarily mean better? Here are several tips you need to know about Wells Fargo Mortgage and banks in general to help you avoid an expensive mistake with your next home loan.

Free Checking Accounts

Wells Fargo’s business model is to lure customers in with the promise of “free” checking accounts. Then they stick it to you with fees and overpriced investment accounts and loan offerings. Wells Fargo has been accused of predatory lending practices and has recently had their home offices picketed by consumer watch groups. The mortgage division has been accused of targeting homeowners with financial hardships with their overpriced home equity lines.

Bank Originated Mortgage Loans

Wells Fargo Mortgage’s less than sterling reputation notwithstanding, is it ever a good idea to refinance your home mortgage with a bank? There are several problems with Bank originated mortgage loans that you need to be aware of before signing on the dotted line. The first problem has to do with legislation in the United States known as the Real Estate Settlement Procedures act or RESPA. This legislation protects homeowners by requiring mortgage brokers to disclose their profit margin and markup on your home loan. Guess what? Wells Fargo Mortgage and every other bank and credit union in the United Sates are exempt from RESPA.

Thanks to millions of dollars spent by the Banking Lobby Wells Fargo Mortgage is not required to disclose their profit margins on your mortgage. If you neglect to comparison shop and refinance your home loan with Wells Fargo you’ll never know how much the bank has marked up your mortgage rate to make a profit when the loan is sold to investors on the secondary market; after all this is how banks make the majority of their profits. If you’re in the market to refinance why would you even consider doing business with any company that doesn’t have to play by the same rules as everyone else in the market?

How to Save Money on Your Next Mortgage

If you’re looking to save money on your next home loan by lowering your payment the best way to do this is to get a mortgage rate that has not been marked up to give someone a commission. You don’t have to be a financial guru to get a wholesale mortgage rate or avoid junk fees, you just need to take the time to learn how mortgage brokers and banks are compensated for the loans they originate.

You can learn more about your mortgage refinancing options including which fees are junk and can be avoided along with strategies for getting the lowest mortgage rate by checking out my free Underground Mortgage Videos. Register today and you’ll get instant online access to the videos and all the materials you’ll need to lower your payment and save thousands of dollars on your home.

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If you’re considering refinancing your home mortgage loan and are looking for the best mortgage rate in 2009, there are several things you need to know in order to avoid overpaying for the new loan.

Most homeowners have heard of mortgage junk fees but very few are familiar with the evils of Yield Spread Premium or how it raises your monthly payment unnecessarily. Here are several tips to help you get the best mortgage rate in 2009 when mortgage refinancing.

What is Yield Spread Premium?

Mortgage brokers receive compensation for their work in two ways. Your broker will typically charge you an origination fee for their part in arranging your loan which will be disclosed on your Good Faith Estimate. This fee could be as much as five percent but typically runs anywhere from 2-3%. One percent is actually a reasonable fee to pay your mortgage broker for loan origination.

The second way mortgage brokers receive compensation is from Yield Spread Premium on your loan. Yield Spread Premium is a percentage of your loan amount paid by the lender when the mortgage broker locks and closes your home loan with a higher than necessary mortgage rate. I say “higher than necessary” because the mortgage broker is already being compensated for their work with the origination fee you’re paying. Any amount of Yield Spread Premium on your loan could effectively double or triple the broker’s compensation on your loan.

Best Mortgage Rate 2009

In order to get the best mortgage rate when refinancing your mortgage you’ll need to avoid Yield Spread Premium completely. This unnecessary markup of your mortgage rate can add hundreds of dollars to your monthly payment, and for what reason? Just to give your mortgage broker a bonus to make their boat payment? Not on my watch…the free videos on this website will show you not only how to avoid Yield Spread Premium and lender junk fees responsible for homeowners in the United States overpaying nearly sixteen billion dollars every year according to the government.

Check out my Underground Mortgage Videos today and you’ll get immediate online access to the mortgage tutorial in my password protected memberhip area and a list of mortgage brokers in your area that do not pad their loans with Yield Spread Premium.

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If you are in the process of shopping for a home loan there are a number of Refinance Fees you need to avoid if you don’t want to overpay. Many of these fees are charged by the lender; however, there are several refinance fees that do nothing but line your mortgage broker’s pockets. Here are several tips to help you avoid paying too much for your next mortgage loan.

Refinance Fees

When refinancing your home mortgage loan you can reasonably expect to pay many of the same fees you paid when purchasing your home. The problem is that you probably didn’t have a good idea which of those fees were necessary and which were pure garbage when you purchased your home. Refinance fees typically come from three sources: the lender, the broker, and third party companies involved with closing your mortgage.

Mortgage Broker Refinance Fees

Honest mortgage brokers explain their fees upfront and will typically only charge you a loan origination fee. This refinance fee will often appear in your loan documents as “origination points” and a reasonable amount to pay for loan origination is one percent of your mortgage amount. Many brokers charge as much as five percent or more; however, you should never agree to pay this much for a mortgage broker’s services.

There are a number of mortgage broker junk fees you’ll want to keep an eye out for when refinancing. At the top of this list is the so called “rate lock fee.” Lenders never charge a fee for locking in your mortgage rate. If your mortgage broker is charging you a fee for locking in your interest rate you’re probably dealing with a dishonest mortgage broker. Another warning flag to watch out for is if your broker verbally locks your mortgage rate or provides you a written lock on company letterhead. Rate lock confirmation should always come from the lender and be confirmed in writing. If you have verbally locked your mortgage rate you haven’t locked anything.

Dishonest mortgage brokers pass of their own rate lock confirmation and tell you the rate lock from the lender is proprietary or confidential and that you cannot see it. They tell you this because they’re hiding a fee they receive from the lender for marking up your mortgage rate…more on this fee later; however, you know you are dealing with a 100% dishonest mortgage broker if they will not show you the rate lock confirmation in writing from the lender. Other junk fees include broker courier fees and processing fees. If you find these on your Good Faith Estimate or HUD-1 statement you’ll want to have a heart-to-heart with your mortgage broker and strongly consider taking your business somewhere else.

Mortgage Lender Refinance Fees

Once your mortgage broker has completed processing your application the loan is transferred to underwriting at your mortgage lender. You can expect to pay underwriting fees at this stage of the game however, most of the lender fees are not junk fees and cannot be avoided. Your mortgage company or broker is responsible for 90% of the junk fees you’ll encounter when refinancing your mortgage loan unless you refinance with a bank or credit union.

Many homeowners think they’ll get the best deal and avoid junk refinance fees by sticking with their bank or credit union. Unfortunately this simply isn’t true…banks and credit unions are exempt from key legislation in the United States known as the Real Estate Settlement Procedures Act that requires mortgage companies and brokers to disclose their profit margins and markup on your loan. This means if you refinance your home loan with a bank or credit union you’ll never know how much they’ve marked up your mortgage loan or how much you’ve overpaid. Never refinance your home mortgage with a bank or credit union.

Hidden Refinance Fees

Now that you know banks and credit unions are a bad idea there is one hidden fee you need to know about before choosing a broker to refinance your home loan. Mortgage brokers receive their compensation for arranging your loan from two sources. We’ve already discussed loan origination fees and you now know that a reasonable fee to pay your broker is one percent of your loan amount, but what about this “hidden” compensation? Did you know that mortgage lenders reward brokers for overcharging you? This reward doesn’t come from overcharging you on refinance fees but by marking up your mortgage interest rate.

Mortgage lenders know that the majority of their profit comes from selling your home loan to investors on the secondary market. What better way to boost their profits by selling your loan with an above market mortgage rate for a premium fee. This is why mortgage lenders reward brokers for marking up your mortgage rate. This markup of your mortgage rate creates a percentage of your loan amount for the Mortgage Company or broker. Known as Yield Spread Premium this fee is a cash bonus paid when you lock and close your mortgage loan with a higher than market mortgage rate.

Yield Spread Premium is usually disguised in your loan documents and rarely talked about by your broker. In fact, many mortgage brokers become angry and defensive when questioned about Yield Spread Premium. This is another warning flag that you’re dealing with a potentially dishonest broker if they refuse to discuss Yield Spread Premium on your loan. How can you spot this unnecessary markup of your mortgage rate? I’ll tell you…

Your first opportunity to recognize and avoid Yield Spread Premium comes not on the Good Faith Estimate but on the rate lock confirmation from your lender. This is why many dishonest mortgage brokers refuse to show you the confirmation claiming that it’s confidential and proprietary. Rubbish! They just don’t want you to see how much they’ve marked up your mortgage rate and the fee your lender is paying them for overcharging you!

Why Yield Spread Premium is Bad

You’ve learned how mortgage brokers make money from arranging your loan and you’ve learned about Yield Spread Premium; however, you might be asking why should I care about a fee paid by the lender? After all it’s not coming out of my pocket right? Wrong! It’s not the fee you should be concerned about but rather the reason your mortgage lender is paying this fee. Remember your mortgage broker receives this fee for marking up your mortgage rate. Your broker is paid one percent of your loan amount for every .25 percent they markup of your interest rate. What does this markup do to your monthly payment amount?

Suppose you’re refinancing your home for $300,000 and the broker quotes you a mortgage rate of 5.5 percent, charging you a loan origination fee of one percent or in this case $3,000. Sounds like a good deal right? What you don’t know is that you actually qualified for a 5.0 percent mortgage rate and the broker marked it up by .5 percent to get a bonus from the lender of $6,000. What does this markup do to your payment? At 5.5 percent on a fixed rate 30 year mortgage your monthly payment will be $1,700 per month. If you had the mortgage rate you deserve at 5.0 percent your monthly payment would be only $1600 per month! That’s $1,200 a year you’re throwing away just to give your mortgage broker an unnecessary bonus for overcharging you!

Happily Yield Spread Premium can be avoided. If you’ve read this far you’re head and shoulders above most homeowners out there who have never heard of Yield Spread Premium. You can learn more about avoiding the unnecessary markup of your mortgage rate and other junk fees by registering for the free mortgage videos on this website.

Check out my Underground Mortgage Videos today and you’ll have instant, online access to these award winning mortgage videos and all resources in our password protected member area for free.

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If you are a Florida homeowner considering a home mortgage refinance, you should know that mortgage lenders are aggressively seeking loans from the State of Florida, and now is an excellent time to refinance your home loan.

Just because lenders are actively seeking Florida home mortgage refinance loans doesn’t necessarily mean you’ll get a good deal. Here are several tips to help you avoid paying too much for your next Florida home mortgage refinance loan.

Yield Spread Premium: What Every Homeowner Should Know

Did you know the mortgage quotes you receive online and from your local banks and mortgage companies have all been marked up to create a commission for the person arranging your loan? This markup is known as Yield Spread Premium and is simply a percentage of your loan amount created when the mortgage company or broker locks and closes your home loan with an above market mortgage rate. This percentage is a cash amount paid to the broker for overcharging you…often without your knowledge or consent.

Yield Spread Premium is a fee paid by the lender to the mortgage broker in addition to any origination or junk fees you might have unknowingly agreed to pay. According to the Secretary of Housing and Urban Development Yield Spread Premium will be responsible for homeowners in the United States overpaying nearly sixteen billion dollars this year alone…don’t let your Florida home mortgage refinance loan become part of this statistic. It is possible to refinance your mortgage with a wholesale mortgage rate while paying only a one percent origination fee to the broker.

Good Mortgage Brokers Are Not Hard to Find

Finding an honest mortgage broker to arrange your Florida Home mortgage refinance is not as difficult as you might think. The ideal mortgage broker does not work for a large nationwide company but is a small time, self-employed professional. Find a mortgage broker working out of their home? Better still. The reason the ideal broker should be a small, self-employed, business owner is that large brokers working out of expensive offices that employ sales staff are not going to be willing to negotiate the kind of deal you’re looking for.

These brokers have too much overhead to discount their commissions to give you a good deal…the more you overpay, the larger their commissions are with Yield Spread Premium. So how do you get a wholesale mortgage rate when refinancing without paying junk fees? First, you need to learn how to recognize Yield Spread Premium in your loan documents.

How to Spot Yield Spread Premium

The first opportunity you’ll have to catch Yield Spread Premium and thus determine if you’re working with an honest mortgage broke is when you lock in your mortgage rate. The most important thing you need to know about locking in your mortgage rate is that it must be done in writing. When it comes to your mortgage loan, actually anything to do with your finances, verbal agreements are meaningless. You must lock your mortgage rate in writing or you have not locked at all.

Make sure the written confirmation you get from your broker after locking your mortgage rate comes from the lender and is not something your broker typed up. Dishonest mortgage brokers will give you rate lock confirmations typed up on their own letterhead and often tell you that the rate lock is “proprietary” or “confidential” from the lender. This is a load of crap and they are simply trying to hide the Yield Spread Premium on your loan. Rate lock confirmation from the lender will clearly indicate your mortgage rate, lock duration, any points on the loan AND Yield Spread Premium being paid to the mortgage broker.

If you’ve decided that a new Florida home mortgage refinance loan makes sense for your financial situation and you don’t want to overpay for the loan avoiding Yield Spread Premium and other junk fees can save you thousands of dollars every year. You can learn more about refinancing with a wholesale mortgage rate while avoiding these lender junk fees by registering for the free mortgage videos available on this website.

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If you’ve been considering a mortgage refinance for your existing home loan, now is an excellent time to take advantage of historically low interest rates. As a homeowner in today’s pinched economy you might be concerned about overpaying for the new mortgage.

While mortgage refinancing is not for everyone it makes sense if you are looking to lower your monthly payment or convert your Adjustable Rate Mortgage to a fixed rate loan. Here are several tips to help you decide if mortgage refinancing is right for you and to avoid overpaying for your next home loan.

Everyone’s finances are different and mortgage refinancing won’t make sense in every situation. You might be familiar with the “two percent rule” of mortgage refinancing; however, this “rule” is simply bad advice and it makes more sense to determine how long it will take to recoup your expenses from refinancing than to use a blanket “two percent rule.”

Is Mortgage Refinancing Right For You?

To make an informed decision about refinancing your mortgage you’ll determine how much it will cost you to take out the new loan. This includes all closing costs and expenses associated with the new mortgage loan. Suppose for instance it will cost you $3500 to refinance your home and the new monthly payment is going to be $100 lower than your existing mortgage payment. In this example you would divide the cost of refinancing by the savings to determine the number of months it will take to recoup your expenses. ($3500/$100 = 35 months, just shy of three years)

Refinance Your ARM to a Fixed Rate Mortgage

Another common reason for refinancing is to convert a risky Adjustable Rate Mortgage to a more secure fixed rate loan. Many homeowners are finding themselves in financial hot water when their lenders adjust their payment amounts. Many Adjustable Rate Mortgages come with teaser rates that expire after a period of time which can lead to payment shock when the lender adjusts the payment amount to include the new, higher mortgage rate. If you find yourself in this situation and are unable to refinance because you owe more than your home is worth you risk losing your home to foreclosure.

Lower Your Mortgage Payments

Another excellent reason for refinancing your home mortgage is to get a lower payment. There are a couple of ways you can do this: qualify for a lower mortgage rate or extend the term length of your mortgage loan. Term length is the amount of time you have to repay your mortgage and a general rule of thumb is the longer your term length the lower your payment will be. You can learn more about your mortgage refinancing options, including costly lender junk fees to avoid by registering for the free mortgage videos available on this website.

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You might be considering refinancing your home mortgage loan with your bank or credit union to take advantage of today’s low interest rates. After all, what could be more convenient than simply transferring your mortgage payment out of your checking account?

Are bank originated mortgage loans really the best deal for your home mortgage? Here are several tips to help you avoid making an expensive mistake refinancing your home loan.

Refinancing Banks & Your Mortgage Loan

Banks and credit unions love to brag about their mortgage loans. Bank of America for example loves to flaunt its “no fee” mortgage loans… but are they really a good deal? I’d say be sure and read the fine print before taking out a loan from your bank or credit union; however, thanks to the banking lobby there is no fine print for you to read. What do mean by this? Allow me to explain…

The Real Estate Settlement Procedures Act

Also abbreviated RESPA, this is the legislation that required mortgage lenders to disclose their fees and markup. Note that I said “required” as the Banking Lobby spent millions of dollars lobbying congress to change this disclosure legislation to exclude banks…successfully. That’s right, your bank and credit union is exempt from RESPA laws that require fair and honest lending practices in the United States. Banks are simply not required to disclose their markup or profit margins on your mortgage loan.

Service Release Premium

Big deal you might be thinking, bank mortgage rates have to be good to compete with other lenders right? Nope…your bank doesn’t care about being competitive, and most homeowners don’t know the first thing about mortgage rates to understand how banks are making their money.

So how exactly do banks make money from mortgage loans? They just sit back and collect interest from my mortgage payments right? Wrong!

Banks make the majority of their profits selling loans to investors on the secondary mortgage market. The higher the interest rate on your loan the more profit the banks make when your loan is sold. This is why the bank will try and close your loan with the highest mortgage rate possible. Banks know what mortgage rate you could get in the open market from a mortgage broker; however, they mark this rate up create a profit when your loan is sold. This markup of your mortgage rate by the bank is known as Service Release Premium.

Does Service Release Premium Really Matter?

How much could your bank really markup up your mortgage rate and does it really make a difference? Well, suppose you refinance your home for $300,000 with a 30 year fixed rate loan at 5.5%. What you didn’t know is that you could have had a 5.0% mortgage rate from a wholesale lender. What does this markup by the refinancing bank mean for your mortgage payment?

At 5.5% on a $300,000 mortgage your monthly payment will be $1700 per month. If you had the mortgage rate you deserve at 5.0% your monthly payment would only be $1610 per month. That’s $1080 per year you’re flushing down the toilet just to boost your bank’s profits.

How to Get a Wholesale Mortgage Rate

You don’t have to be a financial guru to refinance your mortgage with a wholesale mortgage rate. First of all you should avoid refinancing banks and credit unions no matter how convincing the salesperson or your neighbor Bob. Secondly, you need to find the right person to arrange your new mortgage. This person needs to be a mortgage broker, but not just any broker. Mortgage brokers, like banks, mark up mortgage rates for a commission so you’ll need to find the right broker for the job.

It is possible to refinance your home loan with a wholesale mortgage rate and pay only a 1.0% origination fee to the mortgage broker for arranging the loan. You can learn how to do this for yourself while avoiding costly lender junk fees by checking out my free mortgage videos on this website.

Check out my Underground Mortgage Refinancing Videos today and you’ll get immediate access to videos that save the average homeowner $1,000 per year… Guaranteed!

Wishing you success with your next home mortgage,

Robert Regehr

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If you are considering refinancing your existing home mortgage loan a par mortgage rate could save you thousands of dollars every year that you have the mortgage. The problem is that all of the mortgage rate quotes you see online and from your local mortgage companies include some markup to create a commission for the loan originator.

Here are the basics you need to know about par mortgage rates to help you get the lowest rate and monthly payment when refinancing your mortgage loan.

Mortgage rate sheets used by your Mortgage Company or broker are listed on a scale. Going from one side of the rate sheet to the other, the lower the mortgage rate the more you’ll need to pay in “discount points” to get that lower rate. As you move further along the scale there is a point where no points are required. This point on the rate sheet is a “par mortgage rate.” Move further along the rate sheet and you’ll see that mortgage rates higher than “par” creates cash commission in the form of Yield Spread Premium.

Here’s an example to illustrate how mortgage rate sheets quote an interest rate:

5.75% (.5 point required) 5.875% (.25 point required)
6.0% (zero points) Par Mortgage Rate
6.125% (.25% commission created) 6.25% (.5% commission created)

As you can see, 6% is the par mortgage rate of the day. Mortgage rates above 6% create cash for the Mortgage Company or broker while rates below 6% cost you money in the form of discount points. If you want the lowest possible mortgage rate when refinancing you’ll need to get as close to par as possible without creating Yield Spread Premium for the mortgage broker.

How do you get a par mortgage rate? You can get a par mortgage rate by paying a flat 1% origination fee to the person arranging your mortgage loan. Doing this is easier than you think; you just need to find the right mortgage broker for the job. The free mortgage videos on this website show you not only how to do this but how to avoid lender junk fees in the process. Register today and you’ll be on your way to saving thousands of dollars every year on your next mortgage loan.

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If you’re considering refinancing your home mortgage loan in 2009 and are looking for a wholesale lender there are several things you need to know in order to take advantage of wholesale rates. As a member of the public you cannot simply contact a wholesale lender expecting to refinance your home mortgage with a wholesale mortgage rate.

Here are several tips to help you take advantage of wholesale mortgage rates when refinancing without hidden retail markup of your loan.

What Are Wholesale Mortgage Lenders?

Wholesale mortgage lenders offer loans exclusively through mortgage brokers. Period. You cannot get a wholesale mortgage loan from your bank or credit union no matter what the banker or your neighbor Bob tells you. The reason for this is due to a little know loophole in the Real Estate Settlement Procedures Act that allows banks to hide their markup and profit margin on your loan. Your banker will show you the Bank’s mortgage rate sheets and swear the rates have not been marked up; however, the Banks mortgage rate sheets already include the markup known as Service Release Premium to boost the banks profits when your loan is sold on the secondary market.

What Are Wholesale Mortgage Rates?

Wholesale mortgage rates, also known as par mortgage rates, are interest rates that do not include any Yield Spread Premium or discount points to get them. Yield Spread Premium is a percentage of your loan amount created when the Mortgage Company or broker locks and closes your loan with an above market mortgage rate. This is typically done to create a commission for the broker. Discount Points are a form of prepaid interest due at closing paid to the lender in exchange for a lower mortgage rate. Wholesale mortgage rates include neither Yield Spread Premium nor discount points.

Why Can’t You Just Call Up a Wholesale Lender?

You can certainly call up a wholesale mortgage lender, they all operate retail divisions; however, you will be offered a retail mortgage loan with the same markup as if you had gone through a typical mortgage broker. If banks and wholesale lenders are out of the question how does one go about refinancing with a wholesale mortgage rate? In order to take advantage of wholesale mortgage rates you’ll have to find a mortgage broker willing to work for a flat origination fee without marking up your mortgage rate for Yield Spread Premium.

Finding The Right Mortgage Broker is Easier Than You Think

First, you’ll need to do a little homework learning when and where you can recognize Yield Spread Premium in your loan documents. Second, you’ll need to know how to negotiate with mortgage brokers and where to look for a broker willing to work for a flat origination fee of one percent without marking up your mortgage rate. There are honest mortgage brokers out there willing to work for a flat origination fee of one percent without taking Yield Spread Premium on your loan…you just need to know where to look to find one.

You can learn more about refinancing your home loan with a wholesale mortgage lender by registering for the free mortgage videos on this website. When you register you’ll get a list of mortgage brokers in your area that do not work for Yield Spread Premium and learn how to recognize and avoid lender junk fees.

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If you are considering taking out a mortgage to purchase your new home or refinance an existing home loan with Amerisave Mortgage, it’s well worth your time to check the lender out before signing on the dotted line.

One way of checking out a mortgage lender before taking out a loan is to look at customer complaints. Here is RefiAdvisor’s review of Amerisave Mortgage to help you make an informed decision before taking out your next home loan.

Amerisave Direct Lender. Over Six Billion Funded.

Visit Amerisave’s website and you’re greeted with this claim of six billion dollars in loans funded. They claim to have closed over 10,000 loans in all fifty states and offer an “on time closing guarantee” that will pay you $1,000 should they fail to fund your loan in time. They also offer a “$500 low rate guarantee.” Of course these “guarantees” come with lots of fine print so you should carefully review the conditions before basing your decision on Amerisave’s “guarantees.”

Amerisave Mortgage operates their business as a Mortgage Broker Bank, similar to Ditech.com and eLoan. This means they close their home loans in their company name and fund the loans themselves, making Amerisave exempt from the Real Estate Settlement Procedures Act (RESPA). Because Amerisave is exempt from RESPA disclosure legislation you’ll never know how much money they’re making off you by marking up your mortgage rate.

Amerisave mortgage actively purchases mortgage leads from the likes of LendingTree.com and LowerMyBills.com, two internet lead generation sites with less than sparkling reputations. If you’re a regular reader of this blog you know that Lending Tree’s computerized loan origination fee is passed on to the consumer, as much as $1200 at closing.

Amerisave Mortgage Complaints

According to the Better Business Bureau, Amerisave mortgage had 145 complaints filed during the past 36 months and only 57 of them were resolved in twelve months. Searching Google for Amerisave mortgage complaints reveals 684 listings, including those from RipOffReport.com, which could be worth your time in reading.

If you’d like to learn more about refinancing your mortgage without paying too much check out my free Underground Mortgage Videos on this site and you’ll discover how wholesale mortgage rates can save you thousands of dollars in junk fees and unnecessary markup.

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Considering Internet Mortgage Lenders to refinance your existing home loan? The Internet is an excellent tool for comparing loan offers; however, there are a number of hidden fees that could quickly turn that sweet Internet mortgage rate quote into a financial nightmare.

Here are several tips to help you find the right Internet Mortgage Lenders without paying junk fees or markup of your mortgage rate.

What Are Internet Mortgage Lenders?

Most websites you find on the Internet fall into one of two categories: lead generation and broker banks. The Internet giants like Lending Tree involved with lead generation actually have nothing to do with mortgage loans whatsoever. You might be surprised to learn that all Lending Tree does is run a glorified lead generation site with an enormous advertising budget. That’s right, all Lending Tree does is collect your contact information and financial details and sell your information to the lenders and brokers in their “network” for a premium fee.

Beware Computerized Origination Fees

Did you know that if you refinance your mortgage with one of the lenders in Lending Tree’s network you will be charged a “computerized loan origination fee” of up to $1200 on your Good Faith Estimate? This is how mortgage companies and brokers pass Lending Trees lead generation fees on to you the consumer. Should you have to pay this ridiculous junk fee just so Lending Tree can turn an enormous profit? Of course not. There are hundreds of honest and hardworking mortgage brokers in every market willing to work for a fair loan origination fee without marking up your mortgage rate for fun and profit.

What About Mortgage Broker Banks?

Mortgage broker banks are another evil most homeowners are not familiar with. The Banking Lobby in the United States spent millions of dollars lobbying congress to be exempt from the Real Estate Settlement Procedures Act which requires mortgage brokers to disclose their markup and profit margin on your home loan. Because banks are exempt from this legislation and fund their loans with the bank’s money you’ll never know the bank’s margin on your loan or how much they’ve marked the rate up over a par or wholesale mortgage rate.

Mortgage broker banks were created to take advantage of the loophole in the Real Estate Settlement Procedure Act and are simply a mortgage company or broker that closes and funds loan in its own name. eLoan is an example of an Internet Mortgage Lender that closes in its own name and is therefore not required to disclose how much they’ve marked up your mortgage rate for a profit. Take out a mortgage loan from a mortgage broker bank and you’ll never know how low your mortgage rate could have been…

How to Avoid Mortgage Broker Banks

Broker banks are easy to avoid when refinancing your mortgage. Simply ask your mortgage broker or loan representative if their company closes in the name of the wholesale lender or their own company. If they close in their own name you know you are dealing with a broker bank. There is only one reason for a mortgage company to operate as a mortgage broker bank and that is to take advantage of the loophole created by the banking lobby to exploit homeowners. This is not the type of company or mortgage broker you want to do business with.

Honest Mortgage Brokers Are Not Hard to Find

The ideal mortgage broker is self-employed with at least five to ten years experience. Find one working out of their home? Even better. The reason this makes for the perfect mortgage broker is the small time self-employed brokers do not employ expensive sales staff or pay for posh office spaces. This type of broker is much more likely to give you a good deal without marking up your mortgage rate for a commission. You can learn more about refinancing your mortgage without paying too much by registering for the free videos available on this website. Register today and you’ll receive a list of mortgage brokers in your area that do not mark up mortgage rates for a commission, allowing you to take advantage of wholesale mortgage rates.

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If you are refinancing your home mortgage this holiday season there are several things you need to know in order to avoid paying too much in fees and finance charges.

While mortgage rates are at their lowest levels in 50 years there are a number of junk fees and mortgage broker tricks that can quickly turn a good deal into a horrible mistake. Here are several tips to help you keep more of your money this holiday season when refinancing your home mortgage loan.

Beware Yield Spread Premium

Yield Spread Premium isn’t as scary as it sounds and is a fairly simple concept to wrap your head around even though most homeowners have never heard of it. Simply put this is the markup of your mortgage interest rate by the mortgage company or broker for a commission. Don’t think you’ll be getting away from mortgage rate markup by refinancing with your bank; you’ll pay the same markup or more refinancing with a bank or credit union, the markup just goes by another name. See Service Release Premium for more about this type of markup by a bank or credit union.

How does Yield Spread Premium work? Lenders pay mortgage companies and brokers a commission for locking and closing mortgage loans with above market rates. For every .25 percent you agree to overpay when locking and closing your new home loan the mortgage company or broker arranging your loan is paid one percent of your loan amount as a commission. This commission is paid in addition to any fees you pay for loan origination, including junk fees the mortgage company slips past you.

Don’t Pay Too Much for Your Next Mortgage Loan

Avoiding Yield Spread Premium and junk fees is easier than you think. It’s all about negotiation with your mortgage broker to pay a flat origination fee without commission based markup of your mortgage rate. There are brokers out there willing to work for a flat origination fee of one percent without marking up your mortgage rate for a commission. If you can find a broker like this you’ll be able to take advantage of wholesale mortgage rates when refinancing, saving yourself thousands of dollars every year you keep the loan.

How to Find The Right Mortgage Broker

Finding the right mortgage broker for the job isn’t as hard as it sounds. The ideal mortgage broker does not work for a large firm or Internet website. They are self-employed, have five to ten years of experience, and if you can find one that works out of the home, even better. Why would you want a self-employed, homebound mortgage broker? These brokers do not employ expensive sales staff and do not pay for posh office spaces…therefore their overhead is much lower or non-existent. This mortgage broker is much more likely to negotiate with you over their commission than the fast talking salesperson sitting in a posh office.

You can learn more about refinancing your mortgage this holiday season without paying too much by registering for the free mortgage videos found on this website. Register today and you’ll receive a list of mortgage brokers in your area that do not markup mortgage rates for a commission and you’ll be on the road to saving thousands of dollars on your next mortgage loan.

Happy Holidays!
Robert

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You may have heard on the news recently that mortgage rates are at a 50 year low and now is the perfect time to refinance your home loan. While its true rates are very low right now there a number of junk fees and mortgage broker tricks that can quickly turn that excellent mortgage rate into a horrible deal.

Here are several tips to help you take advantage of historically low mortgage rates without getting ripped off by the lender or mortgage broker.

Yield Spread Premium: What You Need to Know

The number one reason homeowners overpay for their mortgage loans is a little known fee known as Yield Spread Premium. Yield Spread Premium is so bad that the Secretary of Housing and Urban Development was recently quoted that American homeowners will overpay sixteen billion dollars this year alone.

What is Yield Spread Premium? Simply put Yield Spread Premium is the markup of your mortgage interest rate for a commission by the mortgage company or broker. The problem with this markup is that it is rarely disclosed and will cost you in addition to any other fees you pay for loan origination.

Here’s an example of how hidden Yield Spread Premium drives up your monthly mortgage payment costing you thousands of dollars unnecessarily. Suppose you are refinancing your existing home loan for $350,000. Your mortgage company quotes you a mortgage rate of 6.25% and charges you an origination fee of 3% for their part in arranging your loan. This means you will be required to pay $10,500 at closing for loan origination.

What your mortgage company isn’t telling you is that you actually qualified for a 5.5% mortgage rate and they have marked it up for a commission from the lender. The lender behind your loan rewards the mortgage company or broker for overcharging you by paying one percent of your loan amount for every .25% they markup your mortgage rate. In this example the mortgage company was paid an additional $10,500 for overcharging you in addition to the $10,500 you’re paying for loan origination. That’s right; your mortgage company doubled their commission by lying to you about your mortgage rate.

What does this mean for your monthly mortgage payment? With the mortgage rate you got at 6.25% your monthly payment will be $2155. If you had gotten the mortgage rate you deserve at 5.5% your payment would have been only $1980. That’s a difference of $175 per month or $2,100 you’re overpaying every year!

There is good news today since you’ve found this website. The free mortgage videos available online will show you how to avoid Yield Spread Premium when refinancing your mortgage and will get a wholesale mortgage rate. You will also learn which fees charged by the mortgage company and broker are garbage and can be avoided. There are a number of fees mortgage companies and brokers charge like rate lock fees that are complete garbage…if you want the best deal for your home loan you’ll need to avoid these fees in addition to Yield Spread Premium. Register today, you’ll get immediate access to the mortgage videos and materials in our password protected member’s area.

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