Home Mortgage Refinancing Guide

Current mortgage rates are declining and are expected to fall further because of the Government takeover of Freddie Mac and Fannie Mae. Mortgage Rates have been rising steadily due to the recent credit crisis in the United States.

Today on FOX News Warren Buffet stated that that the current mortgage rates are based on a phenomenon known as credit spread, and that “spread” is the reason that mortgage rates have been on the rise. The spread is the result of a lack of investor confidence in mortgage backed securities. The debt carried by Fannie Mae and Freddie Mac was headed for a crisis had the Federal Government not stepped in by taking over.

After the Federal Government took over, current mortgage rates are now more like Treasury bonds. These bonds carry very low risk and have low yields and interest rates. When the Government took over Fannie Mae and Freddie Mac mortgage loans became less risky overnight; as a result mortgage rates are declining.

Now is a great time to refinance your higher interest rate mortgage or even consolidate your more expensive home equity line to lock in this lower rate. Despite falling mortgage rates there are a number of reasons that people overpay when refinancing. The least known but most common is Yield Spread Premium. This markup of your mortgage interest rate for a commission by the broker is responsible for American homeowners overpaying nearly sixteen billion dollars this year alone according to the HUD Secretary.

Homeowners who learn how to recognize this markup of their mortgage interest rate are able to take advantage of wholesale mortgage rates and save thousands of dollars ever year. If you’d like to learn more about refinancing your mortgage with a wholesale rate while avoiding lender junk fees sign up for the free video guide available from this website.

Mortgage Refinancing