Shopping around for a low mortgage rate refinance can be trickier than you think. Did you know that the mortgage quotes you find online and get from local banks and brokers all include a kind of retail markup? Getting a low mortgage rate refinance isn’t hard once you know where to look to avoid this markup and what junk fees to avoid. Here are several tips to help you get that low mortgage rate refinance without throwing your money away on unnecessary markup and junk fees.
Low Mortgage Rate Refinance Secrets
The hidden markup of your low mortgage rate refinance is intended to create an extra commission for the person arranging your home loan. This commission is a fee known to the mortgage fat cats as Yield Spread Premium. The way it works is for every quarter point you unknowingly agree to overpay on your mortgage rate the person arranging your home loan pockets one percent at your expense. The reason I say it’s at your expense is because this quarter point drives your payment up by as much as a hundred dollars or more depending on the amount of your home loan.
Mortgage Broker Compensation
If you want that low mortgage rate refinance it’s important to understand how mortgage brokers are compensated. Your broker gets paid for their work on your home loan in three ways. First, they charge a loan origination fee which is how they “officially” get paid for their work. Second, brokers receive the unnecessary fee known as Yield Spread Premium from the lender for overcharging you, and finally they charge junk fees like the broker courier fee which serves no purpose other than taking your money.
How do you avoid throwing your hard-earned cash away on unnecessary markup and junk fees? The answer is simpler than you might think AND you don’t have to be a personal finance guru to pull it off. All you have to do to get the best low mortgage rate refinance is find the right person to arrange your next home loan. You don’t have to spend countless hours going cross-eyed over Good Faith Estimates looking for mortgage quotes that don’t have hidden markup or junk fees.
How to Avoid Mortgage Refinancing Junk Fees
There are honest, hard-working brokers out there who are willing to work for a flat origination fee of one percent, which is a perfectly reasonable fee without taking Yield Spread Premium or charging junk fees. Your best for finding one is to look for local, self-employed brokers. Find one of these brokers as opposed to brokers working for a large, national chain and they’ll be much more likely to negotiate the type of deal I’m describing here because they don’t have the expensive overhead.
Brokers working out of posh office spaces that employ an expensive sales staff will most likely be unable or unwilling to negotiate the low mortgage rate refinance that I’m describing. Start by telling the potential brokers you interview that you understand how Yield Spread Premium works and will not accept any loan that includes the markup. Offer to pay a reasonable loan origination fee of one percent and you’ll be well on your way to getting the best low mortgage rate refinance available.
You can learn more about getting the best low mortgage rate refinance without paying junk fees with my free Underground Mortgage Videos.
Here’s a quick video to get you started today by exposing why your neighbors are blindly paying too much for their home loans…