If you’re considering refinancing your home loan and are looking for the best Refinancing Mortgage Rates there are several things you should know about the rate quotes you find online. Refinancing your home can quickly slash your payments and help keep more cash in your pocket; however, junk fees and unnecessary markup can quickly turn the sweetest deal sour. Here are several of my best tips to help you find the lowest Refinancing Mortgage Rates without paying too much for your next home loan.
Best Home Refinancing Mortgage Rates
Where are the best mortgage rates available? Many homeowners don’t know good Refinancing Mortgage Rates when they find them because of hidden markup and fees. What is this hidden markup I’m referring to? It has to do with the way brokers and other loan originators make money when you refinance your home. It doesn’t matter where you go for a home loan; your bank, local mortgage brokers, and Internet giants like Lending Tree all markup Refinancing Mortgage Rates for extra profit at your expense. The type of markup depends on the type of lender; however, the end result is the same and you get stuck with a higher than necessary mortgage payment.
This is of course unless you can find someone willing to originate your home loan without marking up your mortgage rate, giving you access to wholesale mortgage rates. Finding the right person can save you as much as $1200 per year in unnecessary finance charges. Who’s the right person to arrange your next home loan? Let me first start with who the right person to arrange your next home loan is not.
Bank Mortgage Loans
Many of your neighbors think bank refinancing mortgage rates are a good deal because the bank cuts out the middleman. There’s no mortgage broker collecting a fee…what could be easier than transferring the money from your checking account every month for your mortgage payment? There are several problems with bank originated home loans the worst of which stems from the way banks are regulated when it comes to mortgage lending.
Mortgage lenders are regulated by your State’s consumer protection laws and most States do a very good job protecting you from predatory lending. Banks on the other hand are regulated by the Federal Government and are exempt from your State’s mortgage lending regulations. Federal Truth-in-Lending laws have so many loopholes and thanks to the Banking Lobby your bank is exempt from the Real Estate Settlement Procedures Act so your Bank is only required to provide you a work of fiction known as the Good Faith Estimate and an Annual Percentage Rate based on this estimate. Because of the loopholes your bank is not required to disclose any of their markup or profit margin on your home loan.
On top of the lack of regulation, banks are in business just to loan money. I know it’s a very slight distinction from mortgage brokers who originate loans for a fee; however, it does make a big difference when it comes to refinancing mortgage rates. Banks make the majority of their profit by selling loans on the secondary market. Home loans with higher than market interest rates make a premium profit for the bank known as Service Release Premium and this is the reason you’ll never get a wholesale refinancing mortgage rates from your bank.
How to Get Wholesale Refinancing Mortgage Rates
It’s not as hard as you think…you don’t have to be a financial guru to pull it off, you simply need to find the right mortgage broker. We’ve already discussed the reason banks don’t offer wholesale mortgage rates to their customers. In fact, banks like Wells Fargo Mortgage are some of the worst predatory lenders around. The bottom line is that if you want the lowest possible refinancing mortgage rates you’ll have to find a mortgage broker willing to work for a flat loan origination fee, usually one percent of your loan amount, without marking up your mortgage rate for a fee known as Yield Spread Premium.
Remember that profit your bank realized when selling your overpriced home loan to investors known as Service Release Premium? Well there’s another fee out there, frequently abused by dishonest mortgage brokers known as Yield Spread Premium that’s paid by mortgage lenders to brokers that lock and close home loans with higher than necessary interest rates. Dishonest mortgage brokers try and explain away Yield Spread Premium by telling you not to worry about the fee since it’s not coming out of your pocket. Truth be told this fee is coming out of your pocket with a higher than necessary mortgage payment.
Want wholesale refinancing mortgage rates for your next home loan? You can get started by telling potential brokers that you understand how Yield Spread Premium works and won’t accept any home loan that includes the markup. Offer to pay them a reasonable loan origination fee of one percent and you’ll be on your way to saving $1200 a year on your next home loan.
Find out more about getting wholesale refinancing mortgage rates for yourself by checking out my free Underground Mortgage Videos.
Here’s a sample of what you’ll get. This video explains why nearly every one of your neighbors is paying too much for their home loan and how you can avoid falling into the same trap. Register today while this is still a free offer.