If you are in the process of taking out a mortgage to purchase your home or refinance an existing mortgage, doing your homework can save you thousands of dollars by avoiding expensive pitfalls in the loan process. If you’re looking for mortgage loan assistance for your new loan the free videos on this website can help you find a mortgage with a wholesale interest rate. Here are the basics you need to know to avoid being ripped off with your next mortgage loan.
What is a Wholesale Mortgage Rate?
Mortgage rates come in two varieties. There are wholesale rates which are typically not offered to members of the public and the retail mortgage rates offered by mortgage companies, internet sites, and mortgage brokers. If wholesale rates are not offered to the public, how do you go about getting one? In order to get a wholesale mortgage rate for loan you’ll need to enlist the help of a mortgage broker and understand how this person is compensated. Mortgage brokers have access to wholesale rates directly from the lenders. Your broker typically marks up this rate to get a commission from the lender; most often without telling you.
Why Mortgage Brokers Inflate Interest Rates
When a mortgage broker quotes you an interest rate the quote you are getting is for a retail mortgage rate. Yield Spread Premium is the markup your mortgage broker adds to your rate to get a commission from the wholesale lender behind your loan. The problem with this markup is that you are already paying for the broker’s services with an origination fee. Agreeing to a mortgage that includes Yield Spread Premium will double, even triple the compensation that your mortgage broker receives unnecessarily.
Mortgage Loan Assistance
The best advice I can give you about your mortgage is to avoid paying Yield Spread Premium on your loan. The origination fee you pay is more than ample compensation for the broker’s work. Some brokers try and justify Yield Spread Premium by saying that you’d have to pay more points on the loan if the fee wasn’t being paid; however, this is simply not true. Yield Spread Premium exists as an incentive for mortgage brokers to overcharge you and anyone that tells you differently is only thinking about their wallet.
Mortgage Refinancing Video Tutorial
The free videos available from this website walk you through the entire process of taking out a new purchase mortgage or refinancing your existing loan. Topics covered include understand how the mortgage markets work, improving your credit before applying, mortgage rate secrets, and a step-guide-step guide to comparison shopping, applying, and closing on the loan. Register for the videos today, access is free with no obligation.
My name is Rob Regehr and I’m a personal finance writer with a chip on my shoulder for banks and brokers that take advantage of my friends and neighbors.
