Are you in the market for home loan refinancing? If so there are several things you need to know about the home loan refinancing quotes you find online to avoid paying too much for your next mortgage. Did you know that nearly all of your neighbors are overpaying for their home loans because of a little known hidden markup of the mortgage rate? Avoid this hidden markup and you can take advantage of the wholesale nature of mortgage rates and slash $1,200 per year from your payment. Here are several of my best mortgage tips to help you cut the fat from your interest rate by avoiding hidden markup when home loan refinancing.
Home Loan Refinancing Online
The Internet is an excellent tool for home loan refinancing. You can quickly locate and compare home loan refinancing quotes from a variety of lenders. The problem with these quotes is that they all include a hidden markup known to mortgage fat cats as Yield Spread Premium. Before we go any further with the topic of home loan refinancing it’s important that you know all the ins and outs of how the person arranging your loan gets paid. It doesn’t matter if this person is a broker, a banker, or a faceless internet giant website like Lending Tree, they all markup of mortgage rates one way or another to boost their profits at your expense. Any markup of your interest rate means your monthly payment will be higher and you’ll have less cash in your pocket at the end of the month.
How to Keep More Cash in Your Pocket
Would saving a hundred dollars a month on your mortgage payment mean something to you? You might think a hundred dollars isn’t much but that amounts to one less bill you’re stretching your budget to cover and that much more cash in your pocket at the end of your month. Is saving $100 a month worth 45 minutes of your time? I can show you how AND you don’t have to be some kind of financial guru to pull it off. Here’s some background you’ll need to know to get started saving today.
I’ve mentioned this hidden markup called Yield Spread Premium (YSP) by fat cat insiders. YSP is simply a reward paid to loan originators for locking and closing your home loan with a higher than necessary mortgage rate. Notice I say “higher than necessary.” The lender behind your loan approves you for a specific rate known as a par mortgage rate. The person arranging your loan then quotes you a higher rate based on what they think you’ll agree to pay much like a used car salesman. Avoid this markup of you’ve got yourself a par or wholesale mortgage rate.
How do Mortgage Brokers Get Paid?
Brokers get paid for their work in two ways. There is the loan origination fee you pay at closing for this person’s services when home loan refinancing. One percent is a perfectly reasonable amount to pay for loan origination; however, many brokers routinely charge as much as 2.5% or more. Then there is the Yield Spread Premium fee. Your broker can receive as much as one percent of your home loan refinancing amount for every .25% they jack up your interest rate. In the case of a broker this fee is disclosed on your HUD-1 statement; however, most brokers cleverly explain the fee away since it’s not coming out of your pocket directly. Indirectly they’re stealing as much as $1200 a year or more from your bottom line.
How can you avoid this unnecessary markup of your mortgage rate? Check out my free mortgage videos and see how easy it is to keep more cash in your pocket after paying your home loan.
Here’s a quick taste to get you started. My underground home loan refinancing videos are free and will only take about 45 minutes of your time…register today, it’s quick and easy.
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.
