If you’re searching for the current mortgage interest rate there are several things you need to know about the rate quotes you find online and from your local mortgage broker. Did you know that according to the HUD Secretary your neighbors are overpaying sixteen billion dollars for their home mortgage loans this year alone? Yep, it’s true…and they don’t have a clue. Here are several of my best current mortgage interest rate shopping tips to help you avoid the same mistakes as your neighbors when it comes to refinancing your home loan.
What is the Current Mortgage Interest Rate?
What is the current mortgage interest rate on any given day? You should know that mortgage rates are quoted from tables meaning that yours could be very different from mine. That’s right, two people with identical homes and credit can be quoted very different mortgage rates on the same day. The reason is that loan originators like mortgage brokers and those humongo-websites like Lending Tree mark up the current mortgage interest rate they are quoting you to collect a hidden commission known as Yield Spread Premium. (Mortgage lender speak for kickback) This fee results in a higher than necessary mortgage payment by a hundred dollars or more every month that you keep the loan. That’s thousands of dollars your neighbors are flushing away because they just didn’t know better.
How to Avoid Hidden Markup & Save
The good news is that you can avoid hidden junk fees like Yield Spread Premium. Before you can avoid this hidden inflation of your current mortgage interest rate, you need to understand how it works. Here’s an example to illustrate my point. Suppose you have a $300,000 California mortgage loan you need to refinance. Your old loan had a mortgage rate of 6.5% and your broker is quoting you 5.75 percent to refinance. Sounds like a good deal, right? What you don’t know about this “current mortgage interest rate” is that the broker marked up your quote to collect the fee known as Yield Spread Premium from the lender. If you had what’s known as a Par Mortgage Rate, the current mortgage interest rate you deserve, you’d be refinancing at 5.0 percent.
What does this unnecessary markup for a lender kickback do to your payment? In the previous example, your payment at 5.75 percent will be $1,750 per month. If you had the current mortgage interest rate you deserve at 5.0 percent your payment would only be $1,610. That’s a difference of $140 per month, a whopping $1,680 per year you’re throwing away because your mortgage broker lied to you.
You don’t have to accept this unnecessary markup on your next home loan. There are brokers willing to work for a flat origination fee of one percent without marking up your home loan for a commission. Find the right person to arrange your next home loan and you’ll have access to wholesale rates while avoiding hidden markup and junk fees. Finding this person is easier than you think; you don’t even have to be a finance guru to pull it off, it just takes a small investment of your time spent watching my free mortgage videos.
You can learn more about finding the right person to arrange your next home loan with a wholesale mortgage rate by checking out my free Underground Mortgage Refinancing Videos.
Here’s a quick sample to get you started refinancing with the lowest possible current mortgage interest rate.
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.
Thanks for giving the wonderful advice in this article.