Home Mortgage Refinancing Guide

If you are considering a new mortgage to refinance your existing loan, the Internet can be an excellent resource for finding a new mortgage. The problem with using the Internet to find a lender is that there are always people trying to help themselves to your money in the process. Here are several tips to help you refinance your mortgage online without paying too much.

The Internet is a wonderful tool for researching mortgage offers and finding the lowest rates. However, there are fees that you need to be aware of when dealing with online lenders. The first fee you should be concerned with is the so called “Computerized Loan Origination Fee.”

What Are Computerized Loan Origination Fees?

You might be surprised to learn that many of the mortgage sites you encounter on the internet actually have nothing to do with mortgage loans at all. These companies put up a flashy mortgage website with a form to collect your personal information. Once you hit submit your information is sold to mortgage lenders and brokers so they can “compete” for your loan.

The fact that your information is sold online isn’t necessarily bad; problems arise when the lender passes this fee back on to you. This happens in the form of a “Computerized Loan Origination Fee.” Here’s an example to illustrate how this fee is used.

You’ve probably seen commercials on television from a website boasting that when “Lender’s compete, you win.” This website boasts that there is no fee for their services; however, what these commercials aren’t telling you is that if you fill out the form on this website is that if you refinance your mortgage with one of the lenders in their network a fee of $1,300 will appear on your Good Faith Estimate. This is a fee charged by your lender paid for their part in “arranging” your mortgage. How can they claim not to be charging you a fee when the lender’s paying them out of your pocket just for filling out a form with your name and address? This is just one of the mortgage scams you’ll find on the Internet today.

Computerized Loan Origination Fees Can Be Avoided

You can avoid paying this ridiculous fee by reading the fine print on every mortgage site you visit before submitting your information. Most mortgage websites are required to disclose their fees in the “Licenses and Disclosure” section of the site. There is one exception to this disclosure requirement that you need to be aware of; a special category of lender know as a broker-bank.

Mortgage broker-banks are basically banks masquerading as a mortgage broker. The only way you’ll be able to tell the difference is by asking your representative if they close in the name of the lender or in their own company. If the answer you get is that they close in their own companies name you’ll know that you’re not dealing with an actual mortgage lender, but a broker-bank.

What’s Wrong With Broker Banks?

The problem with mortgage broker-banks is that due to a loophole in the Real Estate Settlement Procedures Act they are not required to disclose any of their fees, markup, or profit margin on your loan. Another way to tell that you’re dealing with a mortgage broker-bank is that the disclosure statements are noticeably absent from the website. Never do business with any mortgage site that does not have a disclosure statement clearly published outlining their fees and compensation.

You can learn more about your mortgage refinancing options, including expensive pitfalls to avoid like Computerized Loan Origination fees by registering for a free refinancing video tutorial.

Everyone’s seen the television commercials claiming to get mortgage lenders competing for your business. Is refinancing your mortgage using a company with an advertising budget as large as Lending Tree a good idea? The answer to this question will surely surprise you.

Take a look at Lending Tree’s website and you’ll find a link at the bottom of the page called “Licenses and Disclosures.” About halfway down the page in the midst of Lending Tree’s legaleze is a statement required by the Attorney General of Massachusetts in big black type. I’m going to quote a portion for you.

“LendingTree, LLC is not charging you a fee to arrange a mortgage loan from the mortgage Lender. If you choose the traditional LendingTree, LLC path, LendingTree, LLC will be receiving a fee of up to $1,300 from the Lender for arranging this loan. The amount of this fee will be disclosed to you on the Good Faith Estimate you receive from the Lender you select.”

Here’s the problem in plain English. Lending Tree claims they are not charging you a fee for using their site; however, they receive a fee of $1,300 that you have to pay. Hold on a minute, they’re not charging you the fee, but you still have to pay it to them. This type of corporate legal speak is known as a “Computerized Loan Origination Fee.” Are they being honest and up front about this fee? Absolutely not, and this is why the Attorney General of Massachusetts requires this statement in big bold letters as a condition of doing business in that State.

Unfortunately, the problem of Computerized Loan Origination fees is not limited to Lending Tree. Most of the mortgage sites you find on the Internet have absolutely nothing to do with mortgage loans and exist only to collect your personal information so it can be sold to mortgage lenders. There’s nothing wrong with mortgage lead generation until a company like Lending Tree passes their fee on to you. You can learn more about refinancing your mortgage while avoiding costly mistakes like Computerized Loan Origination fees with our free mortgage tutorial.

Everyone loves a good deal and qualifying for the lowest mortgage interest rate can save you a pile of cash over the life of your mortgage loan. There are however, a number of problems that come up when refinancing online and if you’re not careful result in overpaying thousands of dollars. Here are several tips to help you qualify for the best mortgage rate while avoiding costly mistakes when refinancing your mortgage.

Check Your Credit First

One of the factors your mortgage rate is based on is your credit score. Your credit score is derived from the contents of your credit reports; everyone has three reports which are maintained by the three credit agencies of Equifax, Experian, and Trans Union. The problem with these credit reports is that they are extremely prone to errors and if you don’t check before refinancing you could be overlooking a costly error. The good news is that Congress recently passed a law requiring these credit agencies to provide you a free copy of your credit report once every year. You can request your credit report by visiting the website: http://annualcreditreport.com

Read The Fine Print Before Clicking

The next costly mistake many homeowners make is neglecting to read the fine print before entering their contact information into a form. Most mortgage websites you run across have absolutely nothing to do with mortgage loans and exist only to capture user information and sell it to mortgage lenders and brokers. The problem with many of these sites is that the fee is passed on to you the unsuspecting homeowner. This fee is called a “Computerized Loan Origination Fee” and in the case of several well know mortgage sites including Lending Tree.com could cost you as much as $1,300. You can learn more about refinancing your mortgage with our free mortgage refinancing video tutorial.

If you are in the process of refinancing your California home mortgage on the Internet, Computerized Origination fees could cost you as much as $1,300 for your new loan. This happens to homeowners who do not read disclosure statements found on many of the mortgage sites found online. When shopping for a new California mortgage loan you can find the fees disclosed in the licenses and disclosure statements found on the bottom of many of these sites.

What is a Computerized Loan Origination fees? Many of the sites you visit have absolutely nothing to do with mortgage loans. These are businesses that make money generating leads for mortgage companies. They put up a website to collect your contact information and sell “leads” to the highest bidder. There’s nothing wrong with lead generation sites when the fee is paid by the mortgage company or broker; however, many mortgage lenders pass the fee on to you at closing.

One example of a site that charges you the Computerized Loan Origination fee with your California mortgage is Lending Tree. If you look at the licenses & disclosure statement found on Lending Tree’s website you’ll find that Lending Tree receives as much as $1,300 for selling your information. The bad news is that the lender passes this fee on to you. If you refinance your California home loan with one of the lenders in Lending Tree’s “network,” the Computerized Loan Origination fee will appear on your Good Faith Estimate and you’ll be required to pay it at closing.

You can learn more about refinancing your California mortgage without overpaying with our free mortgage tutorial.

If you are in the process of refinancing your mortgage loan there are a number of garbage fees you need to know about. Unknowingly paying these fees will result in paying thousands of dollars unnecessarily for your new mortgage loan. The garbage fees I am referring to pertain to the “Computerized Loan Origination Fee” charged by many mortgage websites like Lending Tree, and the Yield Spread Premium charged by nearly every mortgage company in America.

Computerized Loan Origination Fees

This is a garbage fee charged by lead generation websites that have absolutely nothing to do with mortgage loans. They put up a flashy website, advertise on television with a catchy phrase about “lenders competing” and then sell your personal information to every mortgage lender willing to pay them. If you visit the Lending Tree website for example, look carefully at the Licenses and Disclosure link found at the bottom of the page. This disclosure statement explains that if you fill out the contact form on their site you will have a fee on your Good Faith Estimate for their part in “arranging” your loan. Guess how much this fee is? This Computerized Loan Origination Fee will set you back as much as $1,300, and all you did was fill out a form on their website! There are hundreds if not thousands of these lead generation websites littering the Internet. You can protect yourself by reading the find print before giving up your personal information.

Yield Spread Premium (YSP)

YSP is the markup of your mortgage interest rate by the loan originator for a commission. This commission is in addition to any fees you pay (or overpay) for arranging your mortgage loan. Mortgage companies and brokers do this because the wholesale lender pays them a bonus of one percent of your mortgage amount for every quarter percent you pay over the interest rate you qualified. Not exactly an incentive to keep mortgage brokers honest is it? Fortunately there are ways to avoid paying retail markup of your mortgage interest rate; homeowners who negotiate with their mortgage broker to avoid paying this markup will save themselves thousands of dollars. You can learn more about avoiding Yield Spread Premium, Computerized Loan Origination fees, and other costly mistakes with our free mortgage refinancing video tutorial.