Refinancing Home Mortgage, Avoid the Traps, Get Expert Advice » Mortgage Rates

Lowest Rates Mortgage Lenders

Robert — Sat, 30 Jan 2010 22:36:04 +0000

If you are in the process of taking out a new mortgage loan to refinance you existing mortgage or purchase a new home, there are several things you’ll want to know about mortgage rate quotes to avoid paying too much. You may have arrived here searching for the lowest rates mortgage lenders; however, getting the lowest mortgage rates can be tricky due to hidden markup and junk fees. Here are several of my best mortgage tips to help you find the lowest rates mortgage lenders for your next home loan without paying junk fees.

Lowest Rates Mortgage Lenders

The first thing you need to know about mortgage lenders is that not all lenders are the same. Choosing one type of lender over another can result in paying higher mortgage rates. There are three types of mortgage lenders that I’ll discuss today, as well as the pros and cons of each. The first type is your bank or credit union. The main advantage of taking out a mortgage with your bank is convenience…what could be easier than transferring funds from your checking account every month to pay your mortgage bill? Bank mortgage rates aren’t the greatest, especially when you compare them to wholesale mortgage rates. This is because the bank makes the majority of their profit from your home loan by selling your mortgage to investors on the secondary market. Home loans with higher than market mortgage rates make them a premium profit known as Service Release Premium. Another problem with bank originated mortgage loans is that thanks to a little known loophole in the Real Estate Settlement Procedures Act (RESPA) your bank is not required to disclose their markup or profit margin on your home loan.

The second type of lender we’re going to discuss today is known as a broker bank. In the 90s the Banking Lobby in the United States successfully lobbied Congress to have the RESPA laws changed to exclude banks. This means banks have an unfair advantage over mortgage brokers that are required to disclose any markup of your mortgage rate for a profit. When the law changed a number of mortgage companies and brokers changed their business models to operate like a bank. This means they formed companies that fund home loans with their own cash rather than reselling loans from wholesale lenders. This change in their business model allows these mortgage broker banks to exploit the same loopholes enjoyed by banks. If you take out a mortgage loan from your bank or a broker bank you’ll never get the lowest mortgage rates when refinancing or purchasing your home. How do you recognize a broker bank? Simply ask what name they close your mortgage under. If they close in the name of their company rather than a wholesale lender you know you’re dealing with a mortgage broker bank.

Wholesale Mortgage Loans

Most people, including many mortgage brokers, will tell you that you can’t get wholesale mortgage rates. While many mortgage brokers markup mortgage rates offered by wholesale lenders for a commission known as Yield Spread Premium, it is possible to find a mortgage broker willing to work for a flat origination fee of one percent without marking up your mortgage rate. By paying the origination fee up front, (one percent is perfectly reasonable for the mortgage broker fee) you avoid unnecessary inflation of your mortgage payment. So how do you find a wholesale mortgage loan? You might think by contacting a wholesale mortgage lender directly you’ll be able to cut out the middleman and refinance or purchase with a wholesale mortgage rate. Unfortunately, this isn’t the case. Wholesale mortgage lenders have retail lending divisions so if you want a wholesale mortgage rate you have to find the right mortgage broker to arrange your home loan.

How to Find the Right Mortgage Broker

Getting a wholesale mortgage rate isn’t as hard as it sounds. You don’t have to be a financial guru to pull it off; you’ll just need to find the right mortgage broker for the job. The problem is that many shady mortgage brokers rely on Yield Spread Premium to boost their bottom line at your expense. You’re already paying a perfectly reasonable origination fee for this person’s work arranging your home loan so any commission paid by the mortgage lender for marking up your mortgage rate only drives up your monthly payment unnecessarily.

How do you find the right mortgage broker when refinancing or purchasing your home? Start by telling prospective mortgage brokers that you understand how Yield Spread Premium works and that you will not accept any home loan that includes this markup. Offer to pay a reasonable origination fee for the mortgage broker’s services. One percent is a perfectly reasonable origination fee and there are many honest mortgage brokers willing to arrange your home loan without taking Yield Spread Premium.

2010 RESPA Changes

In a lackluster attempt to protect homeowners from mortgage broker abuse of Yield Spread Premium, the Department of Housing and Urban Development (HUD) enacted several changes effective January 1st, 2010. Mortgage brokers now have to include Yield Spread Premium as part of the origination fee in your loan documents. This doesn’t really help homeowners because mortgage brokers will go on telling you that since the lender is paying that portion of the origination fee and it’s not coming out of your pocket that you shouldn’t worry about it. No big change there. HUD has also revamped the Good Faith Estimate and you will now receive three pages of low-balled fees instead of the two page GFE you’re used to. These changes are pretty much cosmetic and do very little to protect homeowners from abusive mortgage practices. Of course, banks and broker banks are still exempt from RESPA legislation and can charge their borrowers pretty much whatever they like.

You can learn more about getting a wholesale mortgage rate for your next home loan by checking out my Underground Mortgage Refinancing Videos.

Here’s a sample of what you’ll get when you sign up…this video shows you more about how Yield Spread Premium drives up your mortgage payment unnecessarily and what you can do to avoid it.

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Mortgage Rate Watch

Robert — Sun, 17 Jan 2010 19:44:48 +0000

If you’ve been keeping an eye on recent mortgage rate trends or are searching the web for mortgage rates before refinancing your home there are several things you need to know about mortgage quotes you find online. Internet mortgage giants and even your local mom and pop mortgage broker quote mortgage rates that have been marked up to create the commission known as Yield Spread Premium. Never heard of Yield Spread Premium? Don’t sweat it, neither have 98% of your neighbors. According to the Secretary of Housing and Urban Development your neighbors, in fact most Americans, will overpay sixteen billion dollars for their home loans this year alone. Here’s how you can avoid being part of this statistic and get the best mortgage refinancing rates for your next home loan without paying unnecessary closing costs.

Yield Spread Premium Definition

So what is this Yield Spread Premium? Simply put it is a commission paid by the lender to the person arranging your mortgage for locking and closing with a higher than necessary mortgage rate. Yield Spread Premium is paid in addition to loan origination fees you’re already paying this person for the work they do arranging your home loan. Think of Yield Spread Premium as a form of “double dipping” at your expense.

You might think “Why do I care about Yield Spread Premium if the fee is being paid by the lender and not coming out of my pocket?” This is in fact an argument put forth by many mortgage brokers. They tell you not worry about the paid outside of closing (POC charges) found on your Good Faith Estimate and HUD-1 Settlement Statement because the fees are paid by the lender. Think for a moment why would the lender pay this fee for you? I mean really, what’s in it for them? We’ve all learned how evil and greedy banks and credit card companies are after the recent financial bailouts so why would they do anything that cost them a buck?

The reason mortgage lenders pay your mortgage broker Yield Spread Premium is because there IS something in it for them. In fact, Yield Spread Premium is the reason lenders realize the majority of their profits on your home mortgage loan. You see lenders don’t just sit around collecting interest from your home loan to make a buck. Mortgage lenders sell their home loans to investors on the secondary market. Home loans with higher than market mortgage rates bring them the most profit. This is why mortgage lenders reward mortgage brokers for closing loans with higher than necessary mortgage rates…the higher the mortgage rate, the higher the reward. Unfortunately for you, the higher your mortgage rate, the higher your monthly payment will be; however, an unnecessarily high mortgage payment can be avoided.

Avoiding Yield Spread Premium

Feeling overwhelmed with the prospect of refinancing your mortgage? Don’t sweat it…you don’t have to be a financial guru to get a wholesale mortgage rate that doesn’t include Yield Spread Premium. All you need to do to avoid this unnecessary markup is find the right person to arrange your next home loan. Start by approaching local mortgage brokers and tell them you understand how Yield Spread Premium works. Offer to pay a flat origination fee for their services of one percent and be sure to tell them that you won’t accept any mortgage loan that includes Yield Spread Premium.

You can learn more about getting a wholesale mortgage rate for your next home loan while avoiding unnecessary closing costs by registering for my free Underground Mortgage Videos.

Here’s a sample of what you get for free you sign up…this video shows why your neighbors pay too much for their home loans and how you can avoid unnecessary markup and junk fees.

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How Are Mortgage Rates Determined?

Robert — Thu, 12 Nov 2009 01:29:00 +0000

Are you considering a new mortgage loan for your home but want an answer to the question how are mortgage rates determined before refinancing? It might surprise you to find out that mortgage rates have less to do with your credit score and more to do with how greedy the person arranging your home loan is; however, it’s true. Here’s what nearly every mortgage broker in the business hopes you don’t know about your question “how are mortgage rates determined…”

How Are Mortgage Rates Determined Anyhow?

Assuming you have the minimum credit score necessary to qualify for a traditional mortgage loan and meet the loan requirements as far as equity the mortgage rate you get has nothing to do with your credit and everything to do with the person arranging your loan. Your mortgage rate is also determined by the type of mortgage loan originator that you choose. The loan originator is the person arranging your loan: it could be a mortgage company, mortgage banker, or a mortgage broker. Different loan originators are compensated for your home loan in different ways.

Choose a bank to refinance your home loan and you’ll get a mortgage rate that’s been marked up to create a profit for the bank in the form of Service Release Premium. Banks make the majority of their profits from home loans that they close with higher than market mortgage rates when the loans are sold to investors on the secondary market. This “extra” profit is called Service Release Premium and is similar to the Yield Spread Premium that other mortgage companies and brokers collect from lenders when they close home loans with higher than necessary rates.

What kind of mortgage rate should you shop for when refinancing your home? What you want is a wholesale mortgage rate which in the business is called a “par” mortgage rate. Par mortgage rates are simply mortgage rates that you don’t have to pay points to qualify for and do not create Service Release Premium or Yield Spread Premium for whoever arranges your loan. Getting a par mortgage rate for your home isn’t as difficult as you might think…you don’t have to be a financial “guru”…you just have to find the right person to arrange your next home loan.

Understanding Mortgage Rate Sheets

Your mortgage broker probably won’t give you an honest answer to the question “How Are Mortgage Rates Determined” nor will they show the mortgage rate sheets they’re quoting you from. The reason for this is because the rate sheets they get from wholesale lenders quote that lender’s rates with varying degrees of Yield Spread Premium. The broker quotes you a mortgage rate based on what they think you’ll be willing to overpay for the mortgage loan. Sound like a used car salesman? That’s really all most mortgage brokers are…used car salesman taking advantage of their customers with Yield Spread Premium.

Mortgage Yield Spread Premium

How does Yield Spread Premium work? For every .25% that you agree to overpay for your home loan the wholesale lender pays your mortgage broker 1% of your loan amount. This is paid on top of the origination fee and any junk fees you agree to pay. Not coincidentally, nearly all of the junk fees you find in mortgage offers today come from the mortgage broker, not the lender. Our friend the used car salesman rears his ugly head once again as a mortgage broker. How can you avoid Yield Spread Premium when refinancing your home loan and walk away with a par mortgage rate?

You can do this by finding the right mortgage broker for the job. Banks and credit unions simply do not give par mortgage rates to their customers and most mortgage companies are simply unable or unwilling to give you a par mortgage rate. You’ve got to work with a mortgage broker if you want the lowest possible mortgage rate. Finding the right mortgage broker for the job isn’t hard either. Look for small-time, self employed mortgage brokers. Find one that works out of their home? Even better.

These small-time mortgage brokers don’t have the expensive overhead or ridiculous company hummers and will be much more likely to negotiate the kind of deal you’re looking for that doesn’t include Yield Spread Premium.

You can learn more about answering the question how are mortgage rates determined for yourself without paying unnecessary fees by checking out my free Underground Mortgage Refinancing Videos.

Here’s a sample you need to know about this unnecessary markup of your mortgage rate for kickback from the lender known as Yield Spread Premium. Register for these mortgage videos today while this is still a free offer.

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Wholesale Mortgage Loans

Robert — Sun, 08 Nov 2009 21:11:11 +0000

If you’re considering refinancing your home loan you want the lowest mortgage rate and closing costs for your next mortgage. Refinancing with wholesale mortgage loans can not only get you the lowest possible mortgage rates but will help you avoid unnecessary fees… if you know how to do it. Getting wholesale mortgage loans can be tricky for the uninitiated; however, you don’t have to be financial gurus to get wholesale mortgage loans… you just need to know where to go. Here are several tips to help you get a wholesale mortgage loan when refinancing your home without paying unnecessary fees or markup.

Shopping for Wholesale Mortgage Loans

The first thing you need to know about wholesale mortgage loans is that they are not available to members of the public. If you contact a wholesale lender yourself you’ll be dealing with that lender’s retail division, not the wholesale lender itself. Before we can discuss how to go about getting wholesale mortgage loans it’s important to understand what makes a home loan wholesale and how wholesale lenders operate.

Before you can find a wholesale mortgage loan you need to know a little about the different types of mortgage lenders. The three types of mortgage lenders I’ll discuss today are banks, mortgage broker banks, and wholesale mortgage lenders. Bank mortgage loans can seem like a convenient way of refinancing your home loan right? What could be easier than having your mortgage payment automatically transferred from your checking account every month? The problem with bank originated mortgage loans comes from a little known loophole in the Real Estate Settlement Procedures Act that allows your bank to hide their profit margin and markup of your home loan.

Banks fund their mortgage loans with the bank’s money and therefore set their own mortgage rates. Your bank knows what wholesale mortgage rates are but marks up their mortgage rates up to collect a profit when your home loan is sold on the secondary market. Because of the loophole in RESPA legislation the bank is not required to tell you how much they’ve marked up your mortgage loan. The bottom line you need to know about bank home loans is that you’ll never get wholesale mortgage loans from your bank.

What about mortgage broker banks? When the RESPA laws were changed to exclude banks many mortgage brokers restructured their businesses to take advantage of the same loopholes enjoyed by your bank. These mortgage brokers formed lenders that fund their home loans with their own money and were therefore exempt from RESPA laws just like your bank. How can you recognize a mortgage broker bank? Simply ask if your home loan closes in their company’s name…if the mortgage closes in the broker’s name and not the wholesale lender you know you’re dealing with a mortgage broker bank.

Wholesale Mortgage Lenders

Wholesale mortgage lenders offer their products through mortgage brokers and other retail mortgage companies. They don’t offer wholesale mortgage rates to the public, but that doesn’t mean you can’t get wholesale mortgage loans. What makes a mortgage loan wholesale? Aside from the fact that it comes directly from a wholesale lender and not a bank or broker bank wholesale mortgage loans have mortgage rates that have not been marked up to create a commission for the person arranging your loan and do not require discount points be paid at closing. This type of wholesale mortgage rate is also known as a par mortgage rate. Your goal for refinancing your home should be to get as close to par as possible for your mortgage rate. How do you take advantage of par mortgage rates since wholesale lenders do not offer them to members of the public you ask? Simply find the right mortgage broker to arrange your wholesale mortgage loan without marking up your mortgage rate or charge you unnecessary fees.

Mortgage Broker Fees

Before you can find the right mortgage broker to arrange your home loan you’ll need to understand mortgage broker fees and compensation. Your mortgage broker gets paid for their work from a number of sources. The first, most obvious fee is the loan origination fee that appears on your Good Faith Estimate. Your loan origination fee is a flat fee you pay for the mortgage broker’s part in arranging your home loan. This fee is usually a percentage of your loan amount and a reasonable amount to pay the mortgage broker for loan origination is one percent of your home loan amount. Many brokers try and charge more than one percent; however, one percent is more than ample compensation for the mortgage broker’s work on your home loan.

The second way your mortgage broker get’s paid that we’re going to discuss today is the lender paid fee known as Yield Spread Premium. Mortgage lenders reward brokers that lock and close home loans with higher than necessary mortgage rates with a fee known as Yield Spread Premium. For every .25 percent that your mortgage broker overcharges you the lender pays them an additional one percent of your loan amount as a commission, this fee is paid in addition to the origination fee you’re already paying the broker. It goes without saying if you want wholesale mortgage loans you’ll need to find a mortgage broker that doesn’t take Yield Spread Premium in addition to your loan origination fee. Get yourself a mortgage rate that doesn’t include Yield Spread Premium and you’ll have a par mortgage rate, the wholesale mortgage loan you’ve been looking for.

How do you find the right mortgage broker to arrange wholesale mortgage loans? Start by telling potential mortgage brokers that you understand Yield Spread Premium and will not take a mortgage that includes this markup. Tell them you will pay a reasonable origination fee for their services but want a par mortgage rate for your next home loan. Once you’ve found the right mortgage broker for the job you’ll be on the path to refinancing your home with a wholesale mortgage loan.

You can learn more about wholesale mortgage loans and avoiding unnecessary fees when refinancing your home by checking out my free Underground Mortgage Refinancing Videos.

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The Ugly Truth About Bank Mortgage Rates

Robert — Sun, 16 Aug 2009 03:31:33 +0000

If you’re in the market for a new mortgage loan or are thinking about refinancing your existing home loan, you might be considering taking out the mortgage loan from your bank. While it’s true that bank mortgages are a convenient way of taking out a home loan, if you want the best mortgage rates and lowest mortgage payment there is a very compelling reason for avoiding banks. Here are my best mortgage tips to help you avoid paying too much for your next home mortgage loan.

Best Mortgage Rates

Shopping for a mortgage loan is a confusing process for many homeowners. Most people just compare mortgage rates from their bank with a couple mortgage companies out of the phone book thinking that the biggest banks and lenders offer better deals. This might be true for products from the Wal-Marts of the world, when it comes to mortgage loans this mindset will cause you to overpay thousands of dollars.

Mortgage rates, especially those from your bank do not work like other retail purchases you make, buying a plasma television for example. You would think Bank of America, Wachovia Bank, and Wells Fargo Mortgage would offer discount mortgage rates because they are high volume lenders; however, this is simply not the case.

Home mortgage rates, it doesn’t matter if they’re from a wholesale lender or any bank, are not like other consumer products. There is no volume discount when it comes to home loans so it makes no difference if you take out a home loan from a mortgage giant like Wells Fargo Mortgage or the mom and pop mortgage company in a small town. This doesn’t mean that both types of lenders, large corporate giants and small time mortgage brokers alike, don’t have overhead costs that include marketing, office spaces, and the occasional company hummer. (Trust me on this point…you do not want to work with any mortgage company or broker you see tooling around in a hummer with their face and logo splattered all over it.)

Mortgage Rates Are Investment Driven

The mortgage markets do not behave like other retail markets when it comes to supply and demand. When demand is low mortgage rates typically go up…unlike supply and demand of physical products. This is because mortgage rates typically follow the yield, which is return on investment, in the bond markets. When the bond yields are low, which usually corresponds to bad economic news like the current recession, mortgage rates go down. When the bond yields are high mortgage rates go up because the demand of investors affects long term interest rates like what you pay on a 30 year fixed rate mortgage. It’s next to impossible to try and time the market when it comes to mortgage rates. Your energies are best spent shopping for the right person to arrange your next home loan rather than trying to predict when mortgage rates are going up or down.

What You Need to Know About Bank Mortgage Rates

Banks are not wholesale lenders nor do they offer their customers wholesale mortgage rates. Bank mortgage rates are set by the bank and if you’re willing to pay for a bank mortgage loan you’re welcome to take their rate or leave it…no negotiating. You would think that your bank has to be competitive with wholesale lenders in order to remain competitive in the marketplace; however, that’s not how banks operate when it comes to mortgage loans. Banks rely on the fact that most homeowners don’t understand how mortgage rates work to drive their profits, taking advantage of most people’s lack of knowledge. Most people fall victim to the notion that bigger is better when it comes to mortgage loans, a notion that results in overpaying thousands of dollars more often than not.

One of the biggest problems with bank originated mortgage loans is that your bank is exempt from the Real Estate Settlement Procedures Act and is not required to disclose any of their profit margin or markup on your loan. All the bank is required to disclose to you is an Annual Percentage Rate that they base on a Good Faith Estimate that has all of the fees low-balled to make the overpriced home loan seem more attractive.

Banks don’t offer wholesale mortgage rates to their customers because the bank makes most of their profit when your loan is sold to investors on the secondary market. Your bank may continue to service the loan after they sell it meaning you’ll never know the fast one your bank pulled on you. The profit your bank makes from selling your loan with a higher than market mortgage rate is called Service Release Premium. If you never shop from a wholesale mortgage source such as an honest mortgage broker you’ll never know how much the bank is overcharging for their mortgage loans.

If you want the lowest possible mortgage rate to purchase or refinance your existing home loan you’ll need to get a wholesale mortgage rate which is also known as a par mortgage rate. This means you can’t shop for the “best mortgage” lender or bank, you’ll have to shop for the right person to arrange your next home loan to get a wholesale mortgage rate.

You can learn more about finding the right person to arrange your next home loan so you can take advantage of wholesale mortgage rates while avoiding unnecessary mortgage junk fees by registering for my free underground mortgage refinancing videos. Here’s a sample of what you’ll get when you sign up today:

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The Secret to Getting the Lowest Mortgage Rates

Robert — Mon, 13 Jul 2009 00:51:58 +0000

Getting the lowest mortgage rates can be tricky, especially if you choose the wrong person to arrange your next home loan. Pick the wrong person and you’ll not only get too high a mortgage rate but you’ll pay mortgage junk fees in the process. Here are several tips to help you find the right person to arrange your next home loan while avoiding unnecessary markup and mortgage junk fees.

Mortgage Rate Secrets

When it comes to mortgage loans what you don’t know will hurt you. Did you know the average homeowner in the United States overpays $100 or more per month for their home loan? This because the person arranging the loan pulled a fast one with the mortgage rate… In fact, the Secretary of Housing and Urban Development stated this mortgage trick will cost homeowners in the United Sates sixteen billion dollars this year alone. Don’t want to be a victim of this statistic you say? You don’t have to be…and I’ve got the tools for you to ensure that you’re not.

Where to Get a Mortgage Loan

Before we get into where to find the perfect mortgage loan I should talk about where not to get a home loan.

1. Stay away from your bank. Banks are exempt from the Real Estate Settlement Procedures Act and are not required to disclose any of their markup or profit margins to you. If you take out a home loan from your bank you’ll never know how much you’ve overpaid because the bank is simply not required to tell you. Ignorance is bliss right? Only if you like throwing your money away…
2. Stay away from faceless Internet Mortgage lenders. We’ve all seen the commercials on TV; however, spend a few minutes reading the fine print from the Lending Trees of the world and you’ll quickly discover just how bad their junk fees are.
3. Avoid mortgage brokers that charge Yield Spread Premium and other junk fees. I’ll get into Yield Spread Premium in a moment as this is the hidden junk that causes most people to overpay.

So where is the best place to get a mortgage loan? The best home loan around isn’t going to be from a place, it’s from a person. That’s right, getting the best deal for your mortgage isn’t about shopping around for the best loan offer… it’s all about shopping for the right person to arrange your home loan.

Who Is the Right Person to Arrange Your Mortgage?

The right person isn’t a mortgage banker or the hotshot broker in the yellow pages with a company hummer. These people will be unwilling or unable to negotiate the type of mortgage deal that will get you the lowest possible mortgage rate. What you’ll need to find is a small-time, self-employed mortgage broker willing to work for a flat fee without marking up your mortgage rate for an “extra” commission. What is this extra commission that drives up most people’s mortgage payments unnecessarily wasting thousands of dollars? In the mortgage business the fee created when your mortgage rate is called “Yield Spread Premium.”

Yield Spread Premium Definition

Yield Spread Premium is an amount of money created when the person arranging your loan gets you to pay an unnecessarily high mortgage rate. The lender and your mortgage broker both know the interest rate you qualify; however, the broker overcharges you to collect this fee. Many mortgage brokers today are motivated solely by greed and line their pockets at their customer’s expense. The good news is that you can avoid this unnecessary markup of your interest rate and mortgage broker tricks saving thousands of dollars. It doesn’t matter if you’re refinancing your existing mortgage or taking out a purchase loan…these mortgage tactics work for both.

How does this mortgage rate markup work? Mortgage lenders reward brokers for loans that close with higher than necessary mortgage rates with a commission of 1% for every .25% they overcharge you. This is on top of the origination fee that they’re already charging you, double dipping their fee if you will. What you’ll need to avoid this is find the right mortgage broker instead of shopping for a loan offer. When you’re shopping for a mortgage broker tell them that you understand how Yield Spread Premium works and will not accept any mortgage that includes this markup. Offer to pay this person a flat, one percent mortgage origination fee for a home loan without Yield Spread Premium attached. There are honest mortgage brokers willing to work for one percent, you just have to find one.

What About Mortgage Junk Fees?

Just because you find a mortgage broker willing to work for a one percent origination fee doesn’t mean you shouldn’t be concerned about junk fees. There are a number of junk fees that mortgage brokers slip into their loans just to boost their fees. You should carefully review your HUD-1 statement for junk fees prior to closing. Don’t rely on the Good Faith Estimate you receive as this document is little more than marketing propaganda used to lure homeowners into overpriced mortgage loans. When it comes to fees your HUD-1 Settlement Statement is the final word.

If you find anything on your HUD-1 that resembles a mortgage broker courier fee or rate lock fee you should question consider taking your home loan somewhere else. These fees, especially rate lock fees are pure junk used by dishonest mortgage brokers to boost their profit at your expense. If you are working with a broker that charges a rate lock fee you can be certain you’re dealing with a dishonest mortgage broker that cannot be trusted…period.

You can learn more about avoiding junk fees and getting the lowest possible mortgage rate for your next home loan by registering for my free Underground Mortgage Videos. Here’s a sample of what you’ll learn when you sign up:

Register today, these mortgage refinancing videos are yours free with no obligation.

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Mortgage Rates Are Rising…Did You Miss Out?

Robert — Sat, 30 May 2009 19:59:37 +0000

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.

You can learn more about refinancing your home without unnecessary markup of your mortgage rate to get the lowest payment possible while avoiding junk fees by registering for my Underground Mortgage Videos. Here’s a sample with more you need to know about when to refinance and the unnecessary markup of your mortgage rate.

Register today and you’ll get instant online access to everything you need to get a par mortgage rate for yourself when refinancing without downloading anything to your PC or Mac.

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Should I Refinance

Robert — Wed, 27 May 2009 00:28:02 +0000

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.

You can learn more about answering the question Should I Refinance for yourself while avoiding markup and mortgage junk fees by registering for my Underground Mortgage Videos. Here’s a sample showing you how this hidden markup of your interest rate drives up your mortgage payment unnecessarily.

Register today and you’ll get instant online access to my mortgage videos without downloading anything on your computer.

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Mortgage Refinancing Closing Costs

Robert — Sat, 23 May 2009 21:57:12 +0000

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.

Y ou can learn more about mortgage refinancing closing costs and avoiding junk fees like Yield Spread Premium by registering for my Underground Mortgage Videos. Here’s a sample of what you’ll learn when you register.

Register today and you’ll get instant online access to everything you need to ensure you pay thousands less for your next home loan.

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Compare Mortgage Refinance Rates

Robert — Sat, 09 May 2009 19:49:02 +0000

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.

You can learn more about the best way to compare mortgage refinance rates while avoiding Yield Spread Premium and other junk fees by registering for my Underground Mortgage Videos. Register today and you’ll get instant online access without downloading anything to your personal computer. Here’s a sample of what you’ll learn, this module is called “Your Mortgage Lender Has a Dirty Little Secret.”

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How to Get the Lowest Mortgage Payment When Refinancing Your Home Loan

Robert — Thu, 07 May 2009 01:08:33 +0000

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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Mortgage Rates Information

Robert — Wed, 29 Apr 2009 18:29:50 +0000

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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Mortgage Help Now

Robert — Sun, 19 Apr 2009 02:38:39 +0000

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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Top Mortgage Company When Refinancing Is…

Robert — Wed, 15 Apr 2009 19:38:35 +0000

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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Home Mortgage Refinancing Rates

Robert — Fri, 10 Apr 2009 18:20:09 +0000

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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Cash Out Mortgage Refinancing

Robert — Sat, 28 Mar 2009 23:24:03 +0000

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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Verbal Interest Rate Lock

Robert — Fri, 20 Mar 2009 21:40:37 +0000

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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Home Mortgage Refinance

Robert — Sat, 14 Mar 2009 21:12:25 +0000

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.

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Mortgage Refinancing in 2009

Robert — Sat, 07 Mar 2009 23:13:46 +0000

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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Best Refinance Interest Rate

Robert — Wed, 04 Mar 2009 18:32:40 +0000

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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Best Mortgage Refinance Rates

Robert — Tue, 24 Feb 2009 05:31:31 +0000

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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Mortgage Advice Today

Robert — Mon, 16 Feb 2009 17:23:38 +0000

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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Mortgage Rates Refinance

Robert — Wed, 11 Feb 2009 23:03:42 +0000

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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Refi Problems You Need to Avoid

Robert — Wed, 28 Jan 2009 19:56:23 +0000

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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Refinance Fees

Robert — Sun, 25 Jan 2009 19:37:34 +0000

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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Refinance Fees You Need to Avoid

Robert — Sun, 11 Jan 2009 20:49:33 +0000

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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Par Mortgage Rates Definition

Robert — Thu, 01 Jan 2009 21:11:01 +0000

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.

A “Par” mortgage rate is one that does not cost money to get or creates cash for the mortgage broker as a commission.

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 refinancing videos on this website show you how to get a par mortgage rate while avoiding 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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Internet Mortgage Lenders

Robert — Fri, 26 Dec 2008 23:32:14 +0000

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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Mortgage Refinancing and Your Loan to Value Ratio (LTV)

Robert — Fri, 19 Dec 2008 02:19:57 +0000

If you are considering mortgage refinancing, understating loan-to-value ratio could make the process less painful for you. Many homeowners glaze over at the “technical terminology” associated with mortgage loans like loan-to-value ratio and yield spread premium. If you are such a homeowner here are the basics you need to know about loan-to-value when refinancing your home loan.

Why Loan-to-Value Ratio is Important

When most people talk about loan-to-value ratio when it comes to a mortgage loan they are talking about avoiding Private Mortgage Insurance (PMI). While avoiding private mortgage insurance is important and can save you hundreds of dollars every month, loan-to-value ratios influence other aspects of your home loan including mortgage rate, payment amount, and loan approval.

Loan-to-Value Ratio Definition

Simply put your loan to value is the ratio between your mortgage amount and the value of your home. Suppose for instance you have a $200,000 home with a $100,000 mortgage loan. Your loan-to-value ratio or LTV in this example is 50 percent.

Different types of mortgage loans and lenders have different requirements for LTV ratios. Your primary residence for example can have an LTV as high as 96.5 percent and still qualify for an FHA mortgage loan. Conventional mortgage loan requirements range anywhere from 95 – 97 percent LTV. Thinking about a VA or Rural Housing loan? These loans can go as high as 100 percent LTV.

If avoiding Private Mortgage Insurance (PMI) is your goal you will need to have the loan-to-value ratio below 80%. Private Mortgage Insurance can add hundreds of dollars to your monthly payment amount and does nothing to protect the homeowner; this insurance simply protects the lender from certain types of losses if you default on your mortgage loan. Having a lower LTV ratio can also affect the mortgage rate you get when refinancing your home. Generally the lower your LTV the better your mortgage rate will be which in turn gives you the lowest monthly payment amount.

Having a favorable loan-to-value ratio could mean the difference between getting your loan approved or denied if you are a homeowner with less than perfect credit. Having a low loan-to-value ratio reduces the risk for the mortgage lender, making you more loan worthy. You can learn more about lowering your mortgage rate and payment amount when refinancing while avoiding lender junk fees by registering for the free mortgage videos available on this website.

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Mortgage Refinance Information: Tips You Need to Know

Robert — Sun, 07 Dec 2008 22:23:46 +0000

If you are like most homeowners seeking mortgage refinance information online you’re already familiar with discount points and how they affect your mortgage rates.

What you may not know is that the mortgage industry has a little known dirty secret called Yield Spread Premium.

Simply put, Yield Spread Premium is the opposite of a discount point. Someone… just not you… is getting cash from the lender for marking up your mortgage interest rate. Here are the basics you need to know to avoid paying too much when refinancing your home mortgage loan.

Mortgage Refinancing & Yield Spread Premium

It sounds like a scary term but Yield Spread Premium is a relatively simple concept to wrap your head around. The majority of homeowners today have never heard of Yield Spread Premium nor do they know that this markup of their mortgage rate was quietly slipped into their existing home loan. According to the government Yield Spread Premium is responsible for American homeowners overpaying nearly sixteen billion dollars this year alone.

How Yield Spread Premium Works

Here’s an example: suppose you are refinancing your mortgage for $250,000 and your mortgage broker tells you that you qualify for a mortgage rate of 6.5 percent. What you don’t know is that you actually qualify for a mortgage rate of 6.0%. The “spread” is the difference between what you got and what you could have had…in this example .5%.

The premium created in this example is a 2% commission for the mortgage broker for lying to you. In this example the mortgage broker walked away with a $5,000 payday from the mortgage lender for overcharging you. This is in addition to any fees you paid to the broker for loan origination. 99.99% of homeowners have mortgage loans with higher than necessary mortgage rates. Most likely you’re already paying thousands of dollars too much for your existing mortgage loan.

Yield Spread Premium Can Be Avoided

You can refinance your existing home loan without this unnecessary markup of your mortgage rate. Homeowners who learn to recognize and avoid Yield Spread Premium are able to take advantage of the wholesale nature of mortgage rates and save thousands of dollars every year pay a mortgage. The free online videos available on this website will show you an easy-to-follow method of refinancing your mortgage without this markup of your interest rate and how to avoid lender junk fees.

Check out my Underground Mortgage Videos and you’ll also receive a list of mortgage brokers in your area that don’t mark up mortgage rates to get you on the right track to refinancing without paying too much for your next mortgage loan.

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Today’s Mortgage Rates on the Decline

Robert — Tue, 18 Nov 2008 21:51:48 +0000

Mortgage rates dropped again this week for most loan types. The drop was not as much as we saw last week; however, it’s always good to see mortgage rates go down.

Today’s thirty year fixed mortgage rate dropped to 6.14%, down from 6.2%. This is a small drop compared to the volatility we’ve witnessed in previous weeks. Here’s a rundown of today’s mortgage rates.

Even though today’s drop is slight this does not mean there will not be large fluctuations in the coming months. The markets have not yet stabilized following recent financial turmoil and the outlook for improvement is not so good. The good news is that mortgage rates seem to be declining across the board. Fifteen year mortgage rates fell .07 points to 5.81%, the five year adjustable fell .21 points to 5.98%, and the one year adjustable actually went up to 5.33%.

Mortgage Rate Trends:

November 13th 2008

• 30 year fixed: 6.14%
• 15 year fixed 5.81%
• 5 year adjustable 5.98%
• 1 year adjustable 5.33%

November 6th, 2008

• 30 year fixed: 6.2%
• 15 year fixed: 5.88%
• 5 year adjustable: 6.19%
• 1 year adjustable: 5.25%

October 30th, 2008

• 30 year fixed: 6.46%
• 15 year fixed: 6.19%
• 5 year adjustable: 6.36%
• 1 year adjustable: 5.38%

October 23rd, 2008

• 30 year fixed: 6.04%
• 15 year fixed: 5.72%
• 5 year adjustable: 6.06%
• 1 year adjustable: 5.23%

Tracking the fluctuations in mortgage rates can be entertaining; however, it’s more useful to see how these changes affect your monthly payments. A free mortgage payment calculator will show you exactly how mortgage rates impact your payments. Here’s an example with a $200,000 home loan.

Mortgage Rates from 13 November:

• 30 year fixed payment: $1217
• 15 year fixed payment: $1667
• 5 year adjustable payment: $1196
• 1 year adjustable payment: $1114

Mortgage Rates from 30 October:

• 30 year fixed payment: $1258
• 15 year fixed payment: $1708
• 5 year adjustable payment: $1245
• 1 year adjustable payment: $1120

You’ll notice that over the last two weeks your monthly payment on a $200,000 loan would be $41 less per month just due to fluctuations in mortgage rates. That’s almost $500 per year! If you’re in the market to refinance your existing mortgage or take out a new loan to purchase your home your best bet right now is probably to stay away from the five year adjustable rate mortgage. Volatility in the market and our bad economy makes locking in a fixed rate a good idea for most homeowners.

Since we’re on the subject of today’s bad economy many homeowners are finding it difficult to get approved when refinancing their loans. This isn’t typically due to credit but in most cases is because they are underwater or upside down with their existing loans. Being “underwater” simply means that you owe more on your existing loan than your home is worth. If you’re in this situation you simply will not be able to refinance your home until you’re able to pay down your loan below your home’s value.

You can learn more about refinancing your existing mortgage without paying too much and getting the lowest possible rate by registering for the free mortgage videos on this site.

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Mortgage Refinancing During a Recession

Robert — Fri, 17 Oct 2008 19:25:28 +0000

You can’t turn on the news these days without hearing about how bad the economy is or about the recession looming on the horizon. This gloom and doom about the economy is putting many homeowners off refinancing their homes.

If you are in this situation and would benefit from refinancing your first and second to get a lower payment or just want a lower mortgage rate, there are still good deals available even if your credit is less than ideal. Here are several tips to help you refinance your mortgage during this economic recession.

Mortgage Refinancing Rates Are Still Very Low

With mortgage rates hovering just over 6% now is a very good time to refinance, especially if you are carrying a second mortgage loan with a high interest rate. Many homeowners are putting off refinancing right now because they’ve heard only one in ten mortgage applications are being approved right now. The fact is that applications are being denied not because of the homeowners credit rating but because a large number of people are actually upside down in their homes.

Being upside down means they simply owe more than their property is worth. If you have equity in your home and have a recent appraisal you should have no problem refinancing with competitive mortgage rates.

How to Shop for a Mortgage Loan

Mortgage shopping is a confusing and frustrating process for many homeowners. For many the process is a flurry of confusing documents and estimates and they never really know what they’re getting until after signing on the dotted line. Mortgage refinancing doesn’t have to be like this…you can find a good deal without getting ripped off or paying too much at closing. You just need to do your homework and learn about the one thing that causes most people to pay too much for their mortgage loans: Yield Spread Premium.

What is Yield Spread Premium?

Simply put, Yield Spread Premium is a payoff to the person arranging your loan, a percentage of your mortgage amount created by locking and closing your loan with a higher than necessary mortgage rate. This may sound confusing but it’s really quite simple. Your mortgage broker charges you a fee called an origination fee for their part in refinancing your home loan. The lender pays the broker a commission for closing your mortgage with the highest interest rate possible. This commission from the lender is called Yield Spread Premium.

How Yield Spread Premium Works

Here’s an example to illustrate Yield Spread Premium in action. Suppose for example you are refinancing your home for $225,000. Your mortgage broker quotes you an interest rate of 6.75% and charges you an origination fee of 2%. In this example you will pay the broker $4,500 for their part in arranging your loan. What your mortgage broker isn’t telling you is that you actually qualify for a mortgage rate of 6.25% and they have marked your rate up to get a commission from the lender. In this example the lender is paying the broker an additional 2% of your loan amount (1% for every .25% that they overcharge you). Your mortgage broker is walking away with $9,000 for overcharging you in this case.

Some people think that because the lender is paying the broker fee and it’s not coming out of their pockets they shouldn’t worry about Yield Spread Premium. It’s not the fact that the lender is paying this fee that should concern you; it’s why the fee is being paid. In our homeowner example above the monthly payment at 6.75% will be about $1,450 per month. At 6.25% the same loan would have a monthly payment of $1,380. That’s $840 a year out of your pocket for no good reason.

Yield Spread Premium Can Be Avoided

The good news today is that this unnecessary markup of your mortgage rate can be avoided and you can refinance your home loan without paying junk fees. Finding the right mortgage broker to work for a flat origination fee of 1% without Yield Spread Premium is not difficult if you’re willing to do your homework. Fortunately for you we’ve made this very easy with free online mortgage videos that show you how to refinance with right mortgage broker while avoiding Yield Spread Premium and junk fees. Register for the online video guide today…the tutorial is yours free with no obligation.

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Refinancing Your Mortgage Loan During a Recession

What To Do If Your Mortgage Refinancing Application Is Denied

Robert — Mon, 13 Oct 2008 21:47:33 +0000

With the mortgage meltdown underway in full swing you might think getting a mortgage even with good credit would be difficult. This isn’t necessarily the case.

The problem many homeowners face when refinancing their mortgages is that home values are declining.

If you’re upside down in your home and struggling to refinance there are options available to get you the help you need. Here are several tips to help get you approved when refinancing your home loan.

Why Mortgage Applications Are Denied

Many mortgage brokers these days are closing as few as one out of ten loan applications. The majority of these denials are related to the home and not the borrower. This means the loan-to-value ratio for many borrowers is too high or they are upside-down in their property. Being upside down simply means you owe more than your home is worth.

You might hear that people are being denied mortgage loans because of the credit freeze and this simply isn’t the case. The credit freeze you hear about in the news is because banks have stopped lending money to each other for fear of bank failure and has nothing to do with consumer lending or mortgage loans. There are mortgage loans available and you don’t necessarily need stellar credit to find one.

What To Do If Your Application Is Denied

First of all don’t take it personally…it’s discouraging to have your mortgage denied but the first thing you need to do is look at the big picture. What is your credit score? Have you checked your credit reports for inaccuracies? Spend an hour going over your credit reports from the website AnnualCreditReport.com. It won’t cost you anything and if there are mistakes in your credit file you can bet they are dragging down your credit score.

Next, look at your qualifying ratios. These are your debt-to-income ratio and the loan-to-value ratio of your home. Are your monthly bills too much compared to your monthly income? If so what can you do to payoff or consolidate this debt to bring your debt-to-income ratio back in line? When was your home last appraised and how much do you owe compared to its value?

Mortgage Brokers Can Help

A good mortgage broker can advise you on improving aspects of your application and can place you with loan programs tailored to your individual situation. You have to be careful when working with a mortgage broker, especially in today’s climate, because brokers work for a commission. Loans that bring your broker the best commission probably aren’t the best loans for your situation.

Mortgage brokers can also markup your mortgage rate to get a commission from the lender. This commission is called Yield Spread Premium and according to the HUD Secretary is responsible for Americans overpaying nearly sixteen billion dollars every year. You don’t have to fall victim to this unnecessary markup of your mortgage rate…learn how to recognize the markup and find the right mortgage broker and you can save yourself thousands of dollars every year.

You can learn more about getting your loan approved, finding the right mortgage broker, and avoiding lender junk fees by checking out my Underground Mortgage Videos. You’ll get a list of recommended mortgage brokers in your area that can help get you on the right path to mortgage approval.

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Today’s 30 Year Fixed Mortgage Rate

Robert — Wed, 17 Sep 2008 17:44:54 +0000

If you are considering taking advantage of this month’s low mortgage rates but don’t want to pay too much when refinancing there are several things you need to know about the rate quotes you receive. Here are several tips to help you make sense of it all and avoid paying too much when refinancing your home loan.

Today’s 30 year fixed mortgage rate is 5.5% with .5% of Yield Spread Premium.

You won’t get this rate just by calling up your bank or going to a site like Lending Tree. This is as close as a wholesale rate that is available today and you have to go through a mortgage broker to get this rate without paying excessive points or fees.

You might not be familiar with Yield Spread Premium; this is the fee that inflates your mortgage rate to create a commission for the person arranging your loan. This artificial markup of your mortgage rate can be avoided if you understand mortgage rate sheets. You can get your hands on the lenders current rate sheet by asking to see it the day you lock your rate. An honest mortgage broker will show you the lenders rate sheet; dishonest brokers make excuses telling you that the rate sheets are “proprietary” and “confidential.”

If you want a wholesale or “par” mortgage rate you just have to learn how mortgage loans are priced using the lender’s rate sheets. Keep in mind that mortgage rate sheets change on a daily basis and that you are trying to avoid the markup of your mortgage rate to create unnecessary commission.

You can learn more about avoiding this unnecessary markup of your mortgage interest rate and other junk fees by registering for the free video tutorial found on this web site.

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Mortgage Refinancing This Week

Robert — Tue, 16 Sep 2008 23:04:00 +0000

The kitchen sink is what the Federal Government chucked at the mortgage crisis last week when they took over Freddie Mac and Fannie Mae. When the Feds take over private companies it’s a really big deal and is the one thing that could pull the economy out if its ongoing slump.

Here are several things you can expect to happen over the coming months following the government takeover of Fannie Mae and Freddie Mac.

The most notable impact is the recent drop in mortgage rates. You can expect rates to stay just over five percent for a thirty year fixed rate loan. This is due to the government backing of mortgage bonds which significantly lowers the risk to investors. Because mortgage backed securities have higher yields than treasury bonds you can expect investors to move money which will drive mortgage rates further down.

Falling mortgage rates and the new government backed security of mortgage bonds should also bring foreign investors back to the US bond market, specifically new government insured mortgage bonds. This will have a side benefit of slowing inflation and boosting our faltering economy.

There is one unfortunate aspect of the mortgage industry that the government bailout will not change and that is lender underwriting. Qualifying for a mortgage loan will continue to be tight; even more difficult for homeowners in need of Jumbo mortgage loans. Jumbo loans are not purchased by Freddie Mac or Fannie Mae and have not been positively affected by the government bailout.

There is some good news for jumbo mortgage holders. Mortgage lenders know there is money to be made in this market and are currently offering competitive rates for loans greater than $417,000. The bad news is that tight underwriting standards aren’t expected to change anytime in the immediate future.

If you are a homeowner with good credit looking to refinance your home mortgage there is no better time than the present. Mortgage rates are at all time lows and lenders are desperate for homeowners with a solid financial history. You can learn more about refinancing your mortgage without overpaying and avoiding junk fees by registering for the free mortgage videos available on this website.

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Home Mortgage Refinancing Without Paying Too Much

Robert — Sun, 17 Aug 2008 20:09:43 +0000

Mortgage refinancing is the process of paying off your current home loan with the proceeds of a new mortgage while using your property as loan collateral. There are a number of advantages to refinancing and when done properly can keep you squarely on the road to financial success. Here are several tips to help you decide if mortgage refinancing is right for you.

Is Mortgage Refinancing Right For You?

In order to decide if refinancing is the right move for your situation it is important to understand how the process works. If you are considering refinancing your mortgage as part of a strategy to get out debt you can easily consolidate higher interest debt and gain a tax deduction when refinancing your home. One of the most important considerations when refinancing your home is to secure the lowest possible mortgage rate. The problem with the rate quotes you find on the Internet and from your local mortgage broke is that the person providing you the quote has marked up the rate for a commission. Unless you can recognize and avoid this markup you’ll never get the lowest possible mortgage rate for your home.

Consolidate High Interest Debt

If you are considering consolidating your high interest debt when refinancing you will be borrowing against the existing equity in your home to pay off credit cards and other installment loans. This means you will be borrowing more than you owe on your existing mortgage which could result in qualifying for a slightly higher mortgage rate. A higher mortgage rate results in a higher monthly payment; however, the tradeoff is that you will be paying less to creditors and gain a tax deduction for all of the interest you pay on the consolidated debt.

Another advantage of refinancing your mortgage could be switching to a fixed or variable mortgage rate. Variable or Adjustable Rate Mortgages (ARM) typically have lower rates than their fixed rate counterparts. If you are in need of a lower payment and are not consolidating debt choosing an Adjustable or Hybrid Rate Mortgage could lower your payment if you are currently paying on a fixed rate mortgage loan. Another common reason for refinancing is to avoid a costly balloon payment if you don’t have the cash on hand to pay it off.

There are a number of options available to you when refinancing your mortgage. Direct lenders are available through banks, credit unions, and other finance companies that fund their own loans. This is not necessarily the best option as any entity that funds its own loans is exempt from the Real Estate Settlement Procedures Act and does not have to disclose their profit margins or markup of your loan. Take out a mortgage from your bank and you’ll never know how much you could have saved refinancing your home.

Mortgage Brokers Access Wholesale Rates

A better option is to refinance with a mortgage broker. These individuals have access to wholesale rates and can offer you a much more competitive deal than your bank. The problem is that many brokers pad their commission by marking up your rate, often without telling you. Once you learn to recognize and avoid this unnecessary markup of your mortgage rate you’ll have access to wholesale rates and can literally save thousands of dollars every year.

You can learn more about your mortgage refinancing options, including strategies for avoiding junk fees and the markup of your mortgage rate with the free videos found on this site; register today using the links found at the top of this page and you’ll be on the path to saving thousands of dollars in unnecessary mortgage interest and fees.

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Mortgage Refinancing Online With The Best Home Loan

Robert — Sat, 16 Aug 2008 23:38:28 +0000

If you’re considering talking out a new mortgage to refinance your existing home loan, the Internet is an excellent tool to shop around for the best loan rate. You can use the Internet to easily compare mortgage rates without having your credit pulled.

Most online applications ask that you only describe your credit and do not ask for a Social Security Number. Most sites provide you an offer and then contact you asking to run your credit report.

Because you’re not providing a Social Security Number there is no risk to comparison shopping online and you can quickly compare refinance quotes from a variety of mortgage lenders. There are several websites that allow you to submit your application for preapproval to a variety of lenders and then come back with the top for quotes based on the information you provide.

If you complete the preapproval process using a form like the Guide to Lenders form found on this site you could easily have favorable quotes from several lenders in a matter of minutes. There are a few steps you’ll want to take to ensure that the quotes provided are not lemons:

I. Make certain the rates you are getting are the lowest possible rate based on your credit and qualifying ratios. Mortgage Brokers have a nasty habit of marking up your mortgage rate for a commission from the lender called Yield Spread Premium. You can learn how to avoid paying this markup with the free video tutorial found on this website.

II. Pay close attention to your closing costs. Junk fees are those that serve no purpose and go right into your Mortgage Broker’s pocket. Broker courier fees are an example of junk fees loan originators like to slip into your Good Faith Estimate and Settlement Statement. The free video tutorial on this website features a module on avoiding junk fees.

III. Understand the terms of the mortgage you choose. If your loan has an adjustable mortgage rate find out when it will be adjusted and what caps are included in the contract. Caps are safety features to prevent your mortgage rate and payment from going up too wildly when the lender adjusts your loan. Paying attention at this stage in the game will save you many a sleepless night later on.

Taking advantage of the net to shop and compare loan offers can help you find the most competitive mortgage rates if you go about it correctly. You can learn more about avoiding junk fees and the unnecessary markup of your interest rate by registering for the free videos using the links provided at the top of this page. Don’t let a pushy mortgage broker back you into a loan that isn’t in your best interest. Register today and you’ll be on your way to saving thousands of dollars on your next home loan.

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30 Year Mortgage Rates

Robert — Mon, 21 Jul 2008 21:59:37 +0000

If you’re in the market to refinance your home mortgage loan and search for 30 year mortgage rate information on the internet, you’re bound to find a lot of confusing and conflicting information. How do you sort through the obvious crap and find honest rate information that does not include needles sales markup like the bogus mortgage rates you find on bankrate.com? Here are several tips to help you separate the wheat from the chaff when it comes to hunting for the lowest 30 year mortgage rates when refinancing your home loan.

How Are Mortgage Rates Determined?

The first thing you should know about mortgage rates is that they come in two flavors. There are the retail mortgage rates quoted to 98% of homeowners that don’t know any better and the wholesale rates offered to brokers by big mortgage companies like Countrywide. You might think you can bypass the broker and their markup by going to a wholesale lender directly; however, every lender out there has a wholesale division and a retail division. Contact lenders directly and you’ll always be dealing with their retail division and the same unnecessary markup of your mortgage rate that you’re trying to avoid.

How to Make Sense of 30 Year Mortgage Rates

Before diving into 30 year mortgage rate quotes there is some terminology you need to be familiar with. The first term I’ll cover is the discount point. Most people know about discount points…a fee you’ll pay to buy down your mortgage rate. What you might not know is that genuine discount points go directly to the wholesale lender…unlike the origination points people frequently overpay to the person arranging their loans. If you ever come across a “discount point” that is paid to the broker and not the lender this is a bogus charge that you should never agree to pay. Your broker quoted you a much higher rate then you qualified and pocketed your discount points.

Banks do the same thing…you might think your bank or credit union is getting you a good deal. What you probably don’t know is that banks are exempt from the Real Estate Settlement Procedures Act and never have to disclose how much of your rate is marked up to boost their profit margins.

The next term I need to cover is the so called “par mortgage rate.” What is a par mortgage rate? This is simply the 30 year rate that doesn’t require you to pay any discount points to get it and does not create any money for the broker. By not creating any money for the broker this means it has not been marked up for Yield Spread Premium. You can’t always get par rates when refinancing your home loan but you can come pretty close if you know where to look.

Mortgage brokers are the only way to get genuine par rates because they alone have access to the rates offered by wholesale lenders. The trick is to find a mortgage broker willing to give you access to wholesale rates without marking them up for a commission. Remember that bank mortgage rates always have markup built into them and will typically be half a point (or more) higher than rates offered by wholesale lenders. This is why you should never take out a mortgage loan from your bank or credit union.

The last term I’ll cover today is Yield Spread Premium. This is the commission created for the broker when you lock and close at a higher than par mortgage rate. You may be required to pay discount points to the lender to lower your rate; however, when it comes to creating cash for your brokers “bonus” it’s paid because you’re agreeing to a higher 30 year mortgage rate than you need to. Avoiding Yield Spread Premium needs to be your priority when refinancing your home loan.

Here are several examples how 30 year mortgage rates are quoted on rate sheets from a mortgage broker and a bank so that you understand how the broker and the lender profit from your loan

30 Year Mortgage Rates Offered By a Broker
6.25% ( Includes .25% Broker Markup) 1% Bonus to Your Broker
6.125% (Includes .125% Broker Markup) .5% Bonus to Your Broker
6.0% Par Mortgage Rate – Zero Bonus Paid or Discount Points Required
5.875% (Includes .5% Discount) Paid Directly to the Lender
5.75% (Includes 1.% Discount) Paid Directly to the Lender

When your mortgage rate is quoted higher than par a cash bonus is created for the broker. Rate sheets usually show this cash with parenthesis; however, your rate sheet might show this with a minus sign. When your 30 year mortgage rate is quoted below par, discount points are required to secure this rate for your loan.

The Same 30 Year Mortgage Rates From Your Bank
6.75% (.25% Markup) Goes to Your Bank (Service Release Premium)
6.625% (.125% Markup) Goes to Your Bank (Service Release Premium)
6.5% Par Mortgage Rate With Zero Markup
6.375% (.125% Discount) Discount Point Paid to the Bank
6.25% (.25% Discount) Discount Point Paid to the Bank

One thing to note here is that Yield Spread Premium only applies to mortgage brokers. When the markup is done by your bank this is pure profit and goes by the name Service Release Premium. As you can see in the previous example the so called “par rate” for the bank is .5% higher than the one offered by a broker. This is why you’ll never get a wholesale rate from your bank or credit union.

How do you find a mortgage broker willing to refinance your mortgage with a par 30 year mortgage rate without charging you garbage fees? Check out my free video tutorial series on this site and you’ll discover how to do this with an easy to follow step-by-step mortgage refinancing video guide.

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Current FHA Mortgage Rate

Robert — Wed, 16 Jul 2008 18:31:17 +0000

You may have found this site searching for information on current FHA rates. Finding out about government programs to refinance your home can be confusing, especially if you don’t know where to start.

FHA programs are government insured loans; there are no set FHA mortgage rates…finding an accurate source for rate information becomes more difficult because mortgage rates are almost never what they seem. Here are several tips to help you refinance your home loan without being taken advantage of by the lender.

FHA Mortgage Rates

If you qualify for an FHA loan to refinance your mortgage the rate you qualify for is set by the lender behind your loan. Because FHA loans are backed by the government you’ll be required to purchase Private Mortgage Insurance to protect the lender and government from loss if you default on the loan. What you might not know is that the mortgage rate you’re approved includes markup by the person arranging your loan for a commission. This commission is called Yield Spread Premium and could raise your monthly payment by several hundred dollars unless you know how to avoid it.

Yield Spread Premium & FHA Mortgage Rates

To get an FHA mortgage you’ll need to find someone to arrange the loan for you. This person could be a mortgage company or broker and with the exception of FHA streamline refinancing you’ll be required to pay closing costs and other fees for the loan. What you shouldn’t get stuck paying are the hidden costs created by Yield Spread Premium. FHA loans are no different from conventional loans in the way that they arranged…understanding how the person arranging your loan is paid will help you avoid paying too much when refinancing.

Yield Spread Premium is the commission the person arranging your loan receives for marking up your mortgage rate. When your FHA loan was approved the lender approved you for a certain mortgage rate. The broker marks this rate up because the lender pays them a bonus of 1% of your loan amount for every .25% they markup your rate. This markup is paid in addition to any fees you’re already paying for loan origination.

It is possible to refinance your home with an FHA backed mortgage without paying for Yield Spread Premium. There are mortgage brokers willing to work for a 1% origination fee without marking up your rate.

You can learn more about finding the right mortgage broker without paying junk fees or unnecessary markup by checking out my mortgage refinancing videos. Register today; these mortgage videos are yours free with no obligation.

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Information About Mortgage Lenders

Robert — Sat, 05 Jul 2008 21:18:11 +0000

If you are in the market to refinance your home loan and came to this site looking for information about mortgage lenders, there are several things you need to know to avoid paying too much for your next mortgage loan. The first thing you need to know is that with the exception of bank originated mortgage loans, home loans in the United States are retail products and therefore you will pay retail markup by the person arranging your loan.

You might think “I’ll just go to a bank to avoid this markup…” However, because banks fund their loans with their own money they are exempt from legislation in the United States that required mortgage lenders to disclose their markup making it impossible for you to get the best deal possible from your bank. Here are several tips to help you find the best information about mortgage lenders and save thousands of dollars on your next mortgage loan.

Mortgage Rate Markup

It’s a little known fact in the United States that mortgage loans are marked up by the person arranging the loan for a commission. In the Industry the commission on this markup is called Yield Spread Premium and many brokers conveniently leave the markup off their Good Faith Estimates when quoting you a loan. Mortgage Brokers are required by the Real Estate Settlement Procedures Act to disclose their markup on the HUD-1 Settlement Statement; however, many brokers have clever ways of hiding this markup and the commission the lender pays them.

Yield Spread Premium 101

Suppose you are refinancing your home for $275,000. The broker quotes you a mortgage rate of 6.75% and charges you an origination fee of 2.5% for the loan. The origination fee is what the broker discloses as their fee for arranging your loan and in this case you’ll be charged $6,875 at closing. It’s not uncommon for mortgage brokers to charge as much as 3-4% for the origination fee which if you follow the system found in the free videos on this site you can refinance your home for a flat 1% origination fee. What the mortgage broke isn’t telling you is that your lender actually approved you for a 6.25% interest rate and they’ve marked it up to 6.75% for their commission.

Mortgage lenders pay brokers one percent of your loan amount for every .25% they overcharge you on the mortgage rate. That’s right; in this example the broker pockets an additional 2% of your loan amount for overcharging you. You’re already paying the broker $6,875 for arranging your loan, but the broker pockets another $5,500 at your expense. You get stuck paying $173 more every month in this example just to pay for the mortgage broker’s “extra commission.”

The Best Information About Mortgage Lenders Is Free

The good news for you is that you can avoid this unnecessary markup of your mortgage rate and get the monthly payment that you deserve. The free videos provided on this website show you how to refinance your home loan without paying commission based markup with a flat 1% origination fee. You’ll save thousands of dollars each and every year that you keep the loan. Register today…the videos are yours fee with no strings attached.

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Mortgage Loan Approval Is Becoming More Difficult

Robert — Mon, 23 Jun 2008 22:29:21 +0000

It is becoming increasingly more difficult to get approved for a mortgage loan even with good credit. Mortgage lenders have been tightening standards for approval due to the credit crunch of late…and the end of the crisis is not yet in sight. Here are several tips to help make sure you qualify if you’re in the market to refinance your home mortgage loan in today’s topsy-turvy mortgage market.

What Mortgage Lenders Consider

Mortgages lenders look at a number of factors to not only approve your loan but assign you a mortgage rate. The top aspects lenders look at are your past credit history and the amount of cash you have; however, the single most important factor is your credit worthiness. If your credit score is below 700 right now your only option could be one of the FHA programs. While FHA loans are great the downside for you is that you will be required to purchase Private Mortgage Insurance (PMI). If you’re not familiar with PMI, this insurance protects the lender and the government from losses if you default on the loan.

The amount you’ll pay for PMI premiums depends on your credit history and can add hundreds of dollars to your monthly payment. While this is certainly a downside of Private Mortgage Insurance, if paying the premiums allows you to keep your home it’s certainly worthwhile.

How to Improve Your Credit Rating

To build a strong credit score you can start by paying down the balances of your credit cards so that you have not used more than half of your available credit. Suppose for example that you have a $5,000 limit on your cards…it is best not to exceed $2,500 in available credit. If you have used more than 50% of your available credit shifting the balances to other cards with less than half of the available credit used could improve your credit rating.

Pay More Than The Minimum Payment

Making the minimum payment every month will not help your financial situation. Set your own payment at least 25% higher than what you are due each month. This will not only improve your credit score but help pay down your balances as paying the card minimum will never get you anywhere. Don’t pay off your balances entirely…you want to show that you can use credit responsibly.

You can learn more about qualifying for a better mortgage and improving your credit score by registering for my free video tutorial.

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Mortgage Refinance Options for Less Than Perfect Credit

Robert — Fri, 23 May 2008 16:22:35 +0000

Don’t let bad credit stop you from refinancing your home loan. There are many options available making it possible for you to refinance and even get cash back.. Even if you have a history of foreclosure and bankruptcy on your credit report, you still have options.

You do need to realize that with bad credit you will not get the same types of loans or mortgage rates as someone with perfect credit would, but it is still possible for you to receive a fair deal. The very first thing that you will need to do is to get copies of your credit reports. Your credit score derived from these reports will be a big factor in determining the loan and the mortgage rates that you can receive.

Normally, the lower your credit score is, the higher your mortgage rate, closing cost and origination fees can be. Since this is such a big part of determining what your interest rate and the type of loan will be, you want your score to be as high as possible. There are steps you can follow that will allow you to improve your credit score fairly quickly. You will not be able to make a lot of improvements in a short amount of time; however, every little bit will help.

Review your income and debts to see how much income you would actually have left to pay on a home loan. This is an important step and it is imperative that you do not leave out anything that you pay on. You should even consider the amount of money you spend on gas, food and other necessities to have an accurate figure. This will give you an idea of how the lenders will review your loan application. If your income is not high enough to actually pay back a loan, then you could be denied. On the other hand, if you have adequate amount of income you have a very good chance of getting a home loan.

Keep in mind that the less you borrow when refinancing the lower your monthly payments will be and it can also reduce the rates you will be charged. You’ll need to factor this into your decision to take cash back at closing. Even though you can expect to pay a little more for your home loan if you have bad credit, you still shouldn’t take the first offer you receive. Shop around a little and compare lenders to make sure you are receiving the best loan available. There are some lenders that will take advantage of people with bad credit and others that will offer reasonable rates for your loan.

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Mortgage Rates Predictions

Robert — Mon, 24 Mar 2008 00:56:46 +0000

Home mortgage rates are at near all time lows and many of you might be wondering how to predict when they will bottom out.

Mortgage interest rates are extremely difficult to forecast; sometimes when the Federal Reserve lowers short term interest rates mortgage interest rates actually go up. Sometimes when the stock market takes a hit and bond yields are up mortgage rates go down.

The truth is no one can actually predict when mortgage rates are going to bottom out…anyone that tells you can is selling you a loan.

How can you get the lowest mortgage rates?

Instead of relying on a questionable Mortgage Rate Forecast you can save yourself thousands of dollars by concentrating on what aspects of your mortgage rate you can control. There is one factor affecting your mortgage rate that 90 percent of homeowners have never heard about…namely the commission based markup of your interest rate. You might thing that when you apply for a home loan the lender runs your credit, looks at your qualifying ratios, and will approve your loan with the interest rate you deserve. This simply is not the case.

Beware Your Mortgage Loan Originator

Your mortgage company or broker you choose when taking out a mortgage actually determines whether or not you’ll pay too much for your next home loan. Pick the wrong person for the job and you’ll overpay thousands of dollars every year you keep this mortgage. All because of a little known fact called Yield Spread Premium. Simply put…this is the commission based markup of your interest rate. The broker arranging your mortgage gets paid in two ways. They get paid by charging you an origination fee for their work and they get paid by marking your mortgage rate up for a kickback for lender.

How Yield Spread Premium Works

Yield Spread Premium is a percentage of your home loan amount created when the broker or mortgage company locks and closes your loan with a higher than market interest rate. When you get approved for your home loan the lender approves you for a certain mortgage rate, say 5.5%. The broker turns around and marks this up telling you that you qualified for 6.25% because the lender pays them 1% of your loan amount for every .25% they markup up your loan.

Suppose you’re refinancing your home for $200,000 taking out a fixed rate loan for thirty years will get you a payment of $1,231 at 6.25%. If you had gotten the mortgage rate you deserve at 5.5% your monthly payment would be $1,135 per month. That’s $1,152 that you’re throwing away every year because your mortgage broker took advantage of you!

Mortgage Rates Predictions

As you can see it’s much more important to make sure your loan does not include Yield Spread Premium than it is to try and make mortgage rates predictions. When you avoid Yield Spread Premium you’ll be taking advantage of wholesale mortgage rates and can negotiate with your broker to pay only a one percent mortgage origination fee. There are honest mortgage brokers out there that do not abuse Yield Spread Premium; you just have to find the right person for your loan.

You can learn more about finding the right person to arrange your next mortgage without taking advantage of you by checking out my free Underground Mortgage Videos… and don’t let anyone pull the wool over your eyes making meaningless mortgage rates predictions.

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Mortgage Rate Forecast

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How to Get the Lowest Mortgage Rates

Robert — Sun, 23 Mar 2008 19:38:10 +0000

Most people think that to find the lowest mortgage rates you have to find the best mortgage lender and this just simply isn’t the case. The person arranging your loan has more to do with your mortgage rate than you think…choose the wrong person for the job and you’ll overpay thousands of dollars every year you keep the loan.

What I’m talking about here has nothing to do with your credit or qualifying ratios; it’s all about the markup of your mortgage rate for a commission. Here are the basics you need to know before refinancing your home loan to get the best mortgage rates.

Understanding Mortgage Rate Quotes

Most of the rate quotes you see online are simply garbage. In order to accurately quote you a mortgage rate your mortgage broker needs sixteen pieces of your personal financial information. If you get quotes without providing the intimate details of your finances the person you’re dealing with has no intention of honoring that rate. Assuming that you have provided this information the quotes you receive are not the mortgage rates you qualify, they have been marked up to get a commission from the lender behind your loan.

What is Commission Based Markup?

Most brokers charge an origination fee to you for their services. This fee is disclosed on your Good Faith Estimate and HUD-1 settlement statement. What your broker isn’t telling you is that they get paid by the lender also for marking up your mortgage rate. This markup is what makes mortgage loans “retail” products. Just like buying a car where the dealership markups up your car for profit the mortgage broker marks up your loan to make a buck. This is considered dishonest by many because you’re already paying an origination fee for their work and this markup can cost you thousands of dollars every year.

Yield Spread Premium

The technical term for the fee paid by the lender is Yield Spread Premium. Basically the way it works is the lender pays your broker .25 percent of your home loan for every quarter percent they overcharge you. You might think that a quarter percent isn’t much but in a moment I’ll show you what this markup does to your mortgage payments. Yield Spread Premium is rarely disclosed on the Good Faith Estimate and can be hard to recognize on your HUD-1 statement. The best way to avoid this unnecessary markup is to be upfront with your mortgage broker about your intentions for the loan.

Here is an example to illustrate the markup of your mortgage rate by the broker. Suppose you are refinancing your home for $250,000 and the broker quotes you a rate of 6.75 percent with an origination fee of 1.5%. You’ll pay the broker $3,750 at closing for this fee. Assuming that you take out a 30 year home loan with a fixed mortgage rate your monthly payments for this loan will be $1,622. What your mortgage broker isn’t telling you is that you actually qualified for a 6% mortgage rate and they’ve marked it up for the Yield Spread Premium. If you had actually gotten the mortgage rate you deserve in this example your monthly payment would be $1,498. This is a difference of $1,488 every year you keep this loan…money you’ll pay for no good reason!

Refinance With Wholesale Mortgage Rates

Homeowners who learn to recognize Yield Spread Premium can find mortgage brokers willing to work without the markup. It is possible to refinance your home paying only a one percent origination fee saving thousands of dollars every year.

You can learn more about getting the lowest mortgage rates for yourself by checking out my free Underground Mortgage Videos.

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What Are Par Mortgage Rates?

Robert — Mon, 04 Feb 2008 21:55:43 +0000

You might hear people talking about Par mortgage rates from time to time but what does Par mean? Par simply means a mortgage rate with no discount points or Yield Spread Premium attached. This is the rate you want when refinancing or taking out a new loan to purchase your home. Here are the basics you need to know about Par rates and how you can get one.

Discount Points And Yield Spread Premium

When retail mortgage rates are quoted you may see them based on a certain number of “points.” Points, also called “Discount Points” are a fee you would be required to pay in order to qualify for a specific mortgage rate. One “point” is the equivalent of one percent of your loan amount and paying this fee is typically something you want to avoid; especially if you are trying to refinance with a wholesale rate. Points are easy enough to recognize because the lender tells you about them upfront; however, no one talks about Yield Spread Premium.

Yield Spread Premium is the markup your mortgage broker adds to get a commission from your lender. Lenders pay this “broker rebate” for closing loans with above market interest rates. They do this because the lender makes the majority of their profit by selling loans to investors on the secondary market…loans with above market mortgage rates bring the most profit.

If you want wholesale mortgage rates when refinancing your home loan you’ll need to find a mortgage broker willing to work for you without marking up your mortgage interest rate. You’ll have to pay a reasonable origination fee for their services; however, there are honest mortgage brokers out there who are willing to do this for you.

You can learn more about shopping for par rates while avoiding garbage fees when mortgage refinancing by registering for our free video tutorial.

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30 Year Mortgage Rates

How to Refinance With a Wholesale Mortgage Rate

Robert — Fri, 04 Jan 2008 22:59:05 +0000

Refinancing your mortgage with a wholesale mortgage rate can save you thousands of dollars in unnecessary finance charges. By doing your homework before refinancing you will not only learn how to take advantage of the wholesale nature of mortgage interest rates, but learn how to avoid the junk fees added by your broker and lender. Here are several tips to help save you money when refinancing your home mortgage loan.

What are Wholesale Mortgage Rates?

Wholesale mortgage rates are offered exclusively by wholesale lenders. You will never get a wholesale rate form a bank or credit union and the only way to get them is to find a mortgage broker willing to let you. The problem with mortgage brokers is that one of they ways they are compensated for their services is by marking up your interest rate for a commission. This broker added markup is what makes mortgage rates “retail” and is called Yield Spread Premium.

How to Avoid Yield Spread Premium

How do you find a mortgage broker that won’t markup your mortgage interest rate? Yield Spread Premium is a significant part of most brokers’ income; eliminate this and they’re only working for the origination fee you agree to pay them. One of the biggest problems with Yield Spread Premium today is that the fee is not properly disclosed. When questioned about this markup most brokers try and explain the fee away or simply tell you that because it’s not being paid out of your pocket you shouldn’t worry about it.

Every single mortgage broker you encounter when refinancing your mortgage loan knows about Yield Spread Premium and makes an income from it; however, if you agree to a mortgage with this markup you’ll pay thousands of dollars in unnecessary finance charges. There are mortgage brokers willing to work for a reasonable origination fee without marking up your mortgage rate. Many of these brokers belong to a professional organization known as the “Upfront Mortgage Brokers Association.” Members of this professional association agree to conduct themselves adhering to certain professional and ethical standards….meaning they will not mark up your mortgage rate for a commission and hide the fact that they’re doing it.

The Upfront Mortgage Brokers Association maintains a registry of its members categorized by State on its website. You can search for a member in your state by visiting http://www.upfrontmortgagebrokers.org. If you’re living in a State that doesn’t have any members you can still take advantage of wholesale mortgage rates; however, you’ll have to do some negotiating to find the right broker.

Beware Mortgage Broker Junk Fees

In addition to Yield Spread Premium, there are a number of junk fees you’ll need to keep an eye out for when refinancing. If you find anything on your Good Faith Estimate or HUD-1 statement that resembles a “Broker Courier Fee,” “Rate Lock Fee,” Loan Processing Fee,” or “Application Fee” you should question your mortgage broker as to the validity of these charges. The “Rate Lock Fee” is a perfect example of a garbage fee invented by your mortgage broker. No mortgage lender charges a fee for locking in your interest rate; if you find a rate lock fee in your loan documents this fee has been fabricated by your broker and will go straight into their pocket.

You can learn more about refinancing your mortgage with a wholesale interest rate while avoiding ridiculous garbage fees by registering for a free mortgage DVD. Register today; you’ll get immediate access to the membership area and all of the training materials that will save you thousands of dollars on your next mortgage loan.

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Nationwide Home Mortgage Loan Company

Robert — Thu, 03 Jan 2008 21:56:00 +0000

If you are considering refinancing your mortgage with a nationwide home mortgage loan company, there are several things you need to know about the junk fees you’ll be paying. Nationwide mortgage companies like Countrywide are notorious for overcharging and taking advantage of their borrowers. Here are several tips to help you avoid paying too much for your next mortgage loan.

Nationwide Home Mortgage Loan Junk Fees

If you’re using the Internet for your mortgage search you’ll need to watch out for “Computerized Loan Origination Fees.” These are fees passed on to you by a third party website such as Lending Tree for simply filling out a form on their website. This fee is frequently buried in the fine print and if you’re not careful you could be out of pocket for as much as $1300 unnecessarily. How does mortgage scam work?

Computerized loan origination fees are charged by websites engaged in lead generation. Lending Tree is one of the most notorious lead generation sites and had a class action law suite pending from 2006 for unfair business practices. These websites like lending tree actually have nothing to do with mortgage loans. They put up a fancy website, spend a small fortune advertising on television collecting your personal information, and sell it to the highest bidder.

While lead generation isn’t necessarily bad, in Lending Tree’s case it’s what they’re not telling you that will cost you money. Lending Tree claims there is no fee for using their service; however, if you read the fine print on their Licenses and Disclosure page you’ll find out that if you take out a mortgage from one of the lenders in their “network” you will have a fee on your Good Faith Estimate of up to $1300. This “Computerized Loan Origination Fee” is paid by the lender out of your pocket to Lending Tree for their part in “arranging” your mortgage.

On one hand you have Lending Tree claiming there is no fee for using their website; however, you’ll have to pay the lender this unnecessary fee because you filled out a form on Lending Tree’s website. This “little white lie” could cost you $1300! This is but one reason why choosing a nationwide home mortgage loan company might not be a smart move.

Beware Yield Spread Premium

Another thing you have to watch out for when taking out a mortgage loan is Yield Spread Premium (YSP). Never heard of it before? Most homeowners haven’t and what’s more according to the Secretary of Housing and Urban Development Yield Spread Premium will cost American homeowners $16 billion dollars this year alone. So what is YSP?

Simply put, Yield Spread Premium is the markup of your mortgage rate for a commission. This markup is what makes mortgage rates “retail.” When your mortgage broker quotes you an interest rate they base a proper quote on sixteen pieces of you financial information, including their commission based markup. Your mortgage broker knows the rate you qualify from the wholesale lender; however, they mark this mortgage rate up because the lender pays them a bonus for overcharging you. The broker receives one percent of your mortgage amount for every quarter percent they overcharge you. This bonus is paid in addition to the perfectly reasonable origination fee you are paying for their services. If you agree to pay this unnecessary markup you are effectively doubling, even tripling your mortgage broker’s commission for your loan.

The good news is that garbage fees and Yield Spread Premium can be avoided when taking out a mortgage loan. You can refinance your home with a wholesale mortgage rate without paying too much at closing. To learn more about avoiding YSP and other garbage fees charged by Nationwide Home Mortgage Loan Companies, register for a free mortgage DVD. Request yours today, the DVD is free with no obligation.

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How to Negotiate for the Best Mortgage Rate When Refinancing

Robert — Fri, 14 Dec 2007 22:10:23 +0000

If you are in the process of refinancing your mortgage, negotiating for mortgage rates can be very intimidating. You can greatly improve the odds of negotiating successfully by understanding how your mortgage rate is quoted. Here are the basics you need to know about mortgage rates to help you negotiate for a wholesale mortgage rate and save thousands of dollars when refinancing your mortgage.

What Are Wholesale Mortgage Rates?

Wholesale rates come directly from mortgage lenders and are generally not offered to the public. These loans are sold by third parties and include commission based retail markup. Loan originators are the mortgage companies, brokers, and websites you visit when shopping for a loan. These businesses make money by charging origination fees for their service and by markup up the wholesale rate your lender approved you. The good news is that commission based markup can be avoided if you know how to negotiate when refinancing your mortgage.

Commission Based Markup and Yield Spread Premium

Yield Spread Premium is the technical term for commission based markup of your mortgage interest rate. Your mortgage broker knows the interest rate that you were approved; however, they mark this rate up because the lender pays them a bonus of one percent of your mortgage amount for every .25% they get you to overpay. Most mortgage brokers will never admit that they are marking up your mortgage rate and many become angry and defensive when questioned about their markup.

How Do You Negotiate With Mortgage Brokers?

Negotiation can be intimidating for many homeowners. Fortunately, negotiating for wholesale mortgage rates is more like comparison shopping. If you get a mortgage broker that refuses to answer your question or agree to your terms you’ll simply move on to the next broker. Mortgage brokers are licensed by your State and are a dime a dozen. Spend a little time with your phone book and you should have no problem finding a broker willing to refinance your mortgage with a wholesale rate.

How to Get a Wholesale Mortgage Rate

You can avoid Yield Spread Premium when refinancing your mortgage by finding a mortgage broker willing to work for an origination fee alone without Yield Spread Premium. Start by telling potential mortgage brokers that you understand how Yield Spread Premium works and will not accept a mortgage that includes commission based markup. Tell your mortgage broker that you will pay a reasonable origination fee for their services. A reasonable fee for a mortgage broker’s work is one percent of the mortgage amount.

Once you’ve found a mortgage broker willing to work for an origination fee without charging you Yield Spread Premium you’ll need to pay close attention to your loan documents to ensure this person is being honest with you. Yield Spread Premium will appear on the lender’s rate lock confirmation, your HUD-1 statement, and possibly on the Good Faith Estimate (GFE). Yield Spread Premium should be disclosed on the Good Faith Estimate; however, many brokers omit this markup to make their loan offers more attractive. You’ll notice that the GFE and HUD-1 statement look very similar. If Yield Spread Premium is present with your loan you will find it around lines 810-812 of these documents.

Beware Mortgage Junk Fees

There are a number of garbage fees mortgage brokers try and slip past you when refinancing. If you find anything on your Good Faith Estimate or HUD-1 statement that resembles a rate lock fee, mortgage broker courier fee, processing fee, or application fees, these are garbage fees that you do not have to pay. Take the “rate lock fee” for example. Mortgage lenders never charge your broker a fee for locking in your interest rate. If you find this fee listed on any of your loan documents you can be sure it’s headed for your mortgage broker’s pocket.

You can learn more about refinancing with a wholesale mortgage rate with a free mortgage DVD.

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Understanding Mortgage Rate Quotes

Robert — Tue, 04 Dec 2007 00:04:49 +0000

The mortgage quotes you receive when shopping for a new lender do not give you the actual interest rate you qualify when refinancing. The rate quotes you get are “retail” mortgage quotes that include unnecessary commission based markup. Here are several tips to help you understand how mortgage rates are quoted so you can refinance with the actual mortgage rate you qualify.

Mortgage Yield Spread Premium

The commission based markup of your mortgage rate is called Yield Spread Premium and you can avoid paying it by understanding mortgage quotes and learning how to read lender rate sheets. In order to understand how commission based markup works it is helpful to understand how mortgage brokers and other loan originators are compensated.

Mortgage Broker Compensation

Mortgage brokers are compensated for their work from two sources. You will be required to pay the broker a fee for their part in arranging your loan. This fee is commonly called an origination fee or origination points and should not be more than one percent of the amount you are refinancing. The second method is the so called “lender paid compensation,” or Yield Spread Premium. This fee is paid by the lender as an incentive for overcharging you. For every .25 percent your broker inflates your mortgage rate they receive one percent of your loan amount in lender paid compensation.

Why do lenders reward mortgage brokers for overcharging you? The majority of profit for a lender comes from selling mortgage loans to investors on the secondary market. Mortgage loans with above market interest rates bring premium profits for the lenders and this is why your broker is rewarded for overcharging you.

How Mortgage Rates Are Quoted

Every wholesale lender publishes their rate sheets by fax or online each day. Mortgage brokers use these rate sheets to quote you a rate; however, the quote you get is not based on your credit or financial details as you might expect. Your mortgage quote is based on how much the broker thinks you’re willing to pay in addition to the mortgage rate you qualified. Just like a used car salesman your mortgage broker quotes you an interest rate with their commission check in mind.

How to Avoid Yield Spread Premium

Most homeowners unknowingly agree to retail mortgage rates without knowing their broker marked up the interest rate. This amounts to paying thousands of dollars unnecessarily over the lifetime of the loan. Yield Spread Premium is a completely unnecessary fee because you are already paying a perfectly reasonable origination fee for your mortgage broker’s services. Homeowners who learn to recognize this markup can find honest mortgage brokers and negotiate to avoid paying it. This is much easier than it sounds and you can save yourself thousands of dollars refinancing with a wholesale mortgage rate.

How to Recognize Yield Spread Premium

Many mortgage brokers become defensive when asked about Yield Spread Premium. If your broker gets angry or tells you not to worry about the fee because it’s being paid by the lender you are probably dealing with a dishonest person. Tell your prospective mortgage brokers that you understand how Yield Spread Premium works and will pay a reasonable fee for their services but will not accept loan offers with this “lender paid” compensation.

Ask your mortgage broker to show you the rate sheet from the wholesale lender on the day you lock in your rate. Make sure the rate sheet comes from the lender and is not something typed up on the mortgage broker’s letterhead. If the broker refuses to show you the rate sheet or makes excuses this person is not being honest with you; find another mortgage broker that will be.

You can learn more about your mortgage refinancing options, including costly pitfalls to avoid with a free mortgage DVD.

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Yield Spread Premium for Dummies

Robert — Sun, 25 Nov 2007 22:46:34 +0000

Many homeowners have never heard of Yield Spread Premium and do not understand why their mortgage rate is marked up. Yield Spread Premium sounds complicated; however, once you understand why it’s there, you can avoid paying this unnecessary markup. Cutting the fat from your mortgage rate by as little as a quarter point can lower your monthly payment by hundreds of dollars in many cases. Here are the basics you need to understand about Yield Spread Premium and mortgage interest rates.

Why Yield Spread Premium?

From the lender’s point of view this markup is all about return on investment. Wholesale lenders make the majority of their profits selling mortgage loans to investors on the secondary market. Mortgages with above market interest rates bring these lenders premium profits; this is why lenders incentivize overcharging homeowners with retail mortgage rates.

There’s a lot that goes on behind the scenes when your mortgage broker quotes you an interest rate. Once your broker understands your financial situation they’re sizing you up much like a used car salesman does when you walk onto the lot. Your mortgage broker knows the wholesale mortgage rate you qualify from the wholesale lender; however, the broker wants to up sell you on a higher mortgage rate because of this incentive from the wholesale lender. Here’s an example to illustrate how Yield Spread Premium works.

Suppose you are refinancing your 1st and 2nd mortgage loan for a total of $250,000. You wanted to consolidate these two mortgages with a lower interest rate and one payment. The broker tells you that you qualify for a 6.75% fixed rate loan and charges you 1.5 points for the origination fee. One point in this example is $2,500 as a point equals one percent of your loan amount. What your mortgage broker isn’t telling you is that you actually qualified for a 6.0% mortgage rate and they’ve marked it up for a commission from the lender.

In this example the mortgage broker receives $3,750 from you in origination fees. This is compensation for their work in arranging your mortgage; however, a reasonable amount to pay is no more than one percent. In this example 1.5 percent is too much. In addition to overcharging you for origination fees, the mortgage broker receives a commission from the lender for inflating your interest rate. In this example the broker pockets an additional 3.0%, or $7,500 for overcharging you. This fee is Yield Spread Premium. The broker walks away with $11,250 at your expense for little more than a few hours work.

Yield Spread Premium is Dishonest

The overwhelming majority of mortgage brokers will never admit what they’re doing with your mortgage rate. Those that do often become defensive and even angry about any questioning regarding this fee; they will tell you “since the fee isn’t coming out of your pocket don’t worry about it.” The fact of the matter is this fee is advantageous and dishonest. A bill is currently making its way through the House of Representatives making Yield Spread Premium illegal. If this happens how will your mortgage broker afford their boat payments? Too bad for them.

Until Yield Spread Premium is illegal, savvy homeowners who learn to recognize this unnecessary markup can avoid paying it when refinancing. By avoiding Yield Spread Premium you’ll be able to refinance with wholesale mortgage rates, potentially lowering your monthly payment amount by hundreds of dollars. Refinancing with a wholesale mortgage rate isn’t as difficult as you think. You’ll need to find a mortgage broker willing to work for the origination fee alone, without receiving the kickback from the wholesale lender. Honest mortgage brokers do exist; however they can be difficult to find.

How to Find an Honest Mortgage Broker

Your best bet in finding an honest person to originate your mortgage is to look for a local, self-employed broker. A representative a large brokerage house may not have the authority to refinance your mortgage without Yield Spread Premium; in this case mom and pop shops can be the best way to go. Start by contacting local mortgage brokers in your phone book and telling them that you are looking for a mortgage without Yield Spread Premium. Explain that you understand how the markup works and are willing to pay a reasonable origination fee for their work; however, you will not accept a higher mortgage rate for any lender paid compensation. Once you find a mortgage broker willing to work for an origination fee alone you are well on your way to saving thousands of dollars on your next mortgage.

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