Refinance Home Mortgage Guide

Are you are a homeowner facing foreclosure? There are several options available to you before buyers and investors line up to purchase your home at auction. Getting out of foreclosure might sound difficult; however, the first step in saving your home is to pick up the phone and call your existing lender.

Here are several tips to help get you back on the right track financially and save your home.

A common homeowner mistake is to not ask the mortgage lender for help; however, it might surprise you to learn that you can easily renegotiate your payments with the lender. Lenders want to avoid foreclosure as much as you do…renegotiating could be the best option for all parties concerned, you just have to ask.

Renegotiating is helpful because you are taking control of your finances and it demonstrates to the lender that you plan to keep the mortgage in place. Many people don’t realize that the lender has no interest in taking your home back; foreclosure is an expensive no-win situation for everyone. Your lender only wants your payments to be made on time to avoid default.

Depending on your financial situation the lender could be required to work with you make up your missing payments with a forbearance agreement. Mortgage forbearance agreements are a special payment plan set up by your lender to help you avoid foreclosure. To request one of these plans you should contact your lender’s customer service and ask for the forbearance agreement department.

Mortgage forbearance agreements serve to reduce or postpone your mortgage payments for a specific period of time. While your payments on the loan are deferred to give you time to catch up, you will still accrue interest on the loan during the forbearance period. When your forbearance is over this interest will be added to your loan balance. Forbearance can be a great way to get out of trouble with your mortgage but you have to ask and be approved by your lender to get one.

Once your forbearance request has been approved by the lender they will typically not begin foreclosure proceedings or accelerate your payments. During this time you must agree not to contest collection actions taken against you if you fail to bring your payments current after the forbearance period ends. Some lenders may require you to give them the deed to your home if you fail to meet the terms of your forbearance agreement.

Once your lender approves your mortgage forbearance agreement your payments may be postponed for a period of four months or longer. There is not limit to the number of months the lender can approve forbearance; however, one forbearance period cannot cover more than 12 payments. Learning about your options when managing your mortgage can help keep you out of trouble by making informed decisions.

Remember that your mortgage lender does not want to foreclose on your home; if you’re falling behind on your payments pick up the phone and call your lender. If your lender has already begun foreclosing on your home or you want to learn more about avoiding foreclosure, click the “Stop Foreclosure” icon on the right hand side of this page.

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

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

Understanding Mortgage Rates

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

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

Mortgage Refinance Rates

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

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

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

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

Refinancing your mortgage loan with the wrong broker will cost you thousands of dollars and in today’s economy could even result in the loss of your home.

Remember that mortgage brokers are salespeople and come in multiple shapes in sizes with their own personalities. How can you tell if your mortgage broker is a dud? Here are several tips to help you find the right person to refinance your home mortgage.

Beware Endless Chatter

Like any other salesperson the mortgage broker that talks but never listens to you is the wrong person for the job. Dishonest mortgage brokers use never ending banter to distract you from something they may be hiding in your loan contract. Trust your instincts…if your mortgage broker comes across as a sleazy sales type that talks your ear of endlessly without letting you get a word in you should probably find another broker.

Sloppy With Paperwork & Deadlines

Being punctual is essential when it comes to your mortgage loan. If your mortgage broker is sloppy with paperwork it could cost you money. If your mortgage broker tells they will call you at a certain time and does not keep their appointments consider this a bad sign and move on to another mortgage broker.

Inexperience Costs You

When shopping for a mortgage broker it’s always a good idea only to work with those who have ten years of experience or more. If your broker has to consult the underwriter or someone else in the office before responding to your questions consider it a lack of experience and move on. Don’t worry about hurting anyone’s feelings…you’re not looking to make friends, you want a better mortgage right?

Good Mortgage Brokers Aren’t Hard to Find

The ideal mortgage broker is one that has a minimum of ten years experience, is self employed, and does not employ a sales staff. Finding a mortgage broker that fits this profile working from home is even better. Why? Mortgage brokers with fancy offices and sales staffs have to pay for their plush offices and the salaries of their sales staff.

This means they are going to be much less likely to negotiate fees and things like Yield Spread Premium on your loan. Remember, you’re paying for that fancy office and the hummer parked outside. You can learn more about refinancing your mortgage without paying too much today by registering for our free video tutorial.