Refinance Home Mortgage Guide

Homeowners Rejoice! The Federal government bailout of Freddie Mac and Fannie Mae will result into lower mortgage rates and more credit available according to financial experts. Mortgage rates could fall by as much as one percent from the lofty 6.3% for a traditional 30 year fixed rate home loan.

On Sunday the Federal government took over Freddie Mac and Fannie Mae in a move that’s being heralded as a win for homeowners. According to research and consulting firm Wholesale Access the Government’s move will lower the cost of mortgages and make credit more accessible. If you have been wanting to refinance your higher interest rate mortgage loan now is your chance to grab a lower rate.

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:

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.

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

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

Understanding Mortgage Rates

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

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

Mortgage Refinance Rates

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

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

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

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

There may come a time throughout the life of your home loan in which you decide to refinance or would like to know how to refinance. The more you know about refinancing your mortgage the better off you will be. Here are the steps you will need to take when you are ready to refinance your home loan to make sure it is the right thing for you.

Step One: Do Your Research

Learn as much about refinancing as possible before you begin the process. Basically, when you refinance a home loan it means that you will be receiving a new home loan that will be used to pay off the original mortgage that you owe. This can benefit you in several ways such as lowering your interest rates which will reduce the overall amount that you owe and it can also reduce your monthly payments. In some cases it can even shorten the length of the loan. You should also learn about your credit history because it will be a factor in determining the interest rates you can receive. The better your credit the lower rates you can expect.

Step Two: Compare Mortgage Lenders

Before you choose a lender to use for refinancing you need to take some time to compare different ones to see what they have to offer. You will find that there is a big difference between lenders and comparing these differences will help you make an informed decision. Here are a few of the things that you need to take into consideration. Look at the interest rates and fees that you will be charged for using that specific lender. Carefully consider the terms of the mortgage. Keep in mind that it may be possible for your current lender to offer you a better deal than anyone else so don’t exclude them when comparing lenders.

Step Three: Use Caution

Before you refinance your home loan you need to make sure that you will actually be benefiting yourself in the end. Go over all the details and make sure you know exactly what you will be paying before you accept the new loan. If you will not be saving any money when all is said and done, then it would be pointless to take out the new loan.

Refinancing your home loan can be very beneficial provided you follow the steps above to ensure you receive the best offer possible. You may even be able to borrow a little extra with the new loan that will allow you to do some remodeling or consolidate your higher interest debts and gain a tax deduction.