If you’re in the market for a new mortgage loan to purchase your home or refinance your existing home loan there are several things you need to know about Daily Mortgage Rates in order to avoid paying too much. Most homeowners shop for a mortgage the same way they shop for home appliances by checking daily mortgage rates and hoping they get the lowest rates without paying junk fees. The problem with this approach to shopping for a home loan is that it almost always results in overpaying thousands of dollars for a lousy mortgage loan.
It is possible to cut hundreds of dollars from your mortgage payment with savvy comparison shopping; however, this strategy for getting the best daily mortgage rates might surprise you. Here are my best mortgage tips to help you get the lowest mortgage rates while avoiding costly junk fees on your next home mortgage loan.
Lowest Daily Mortgage Rates
How do you find the lowest daily mortgage rates when shopping for a new home loan? Did you know that every quote you find online, doesn’t matter if it’s from Lending Tree, ING, Ditech, Amerisave, Wells Fargo Mortgage, or the mom and pop shop down the street…they’ve all been marked up to create a commission for someone. The problem with this commission is that you’re paying it in addition to the loan origination fee you’ll pay to whoever arranges your mortgage loan. Origination fees range anywhere from one to three percent…even more in some cases and this is money that you have to come up with just to get your loan to the closing table.
Why Are Daily Mortgage Rates Marked Up?
If you’re reading this today you’ve stumbled upon the mortgage industry’s dirty little secret. Lenders reward loan originators who lock and close home loans with higher than necessary mortgage rates with a cash commission. That’s right…mortgage companies and brokers are incentivized by lenders to rip you off. How does this mortgage scam work?
Mortgage originators are the people you hire to arrange your home loan…they should be working for you. You’re paying their fee right? What ends up happening is that the mortgage company or broker goes behind your back to double, often triple their commission at your expense by inflating your mortgage rate. This higher than necessary mortgage rate results in paying hundreds more per month than you need to…every year that you keep the loan.
Use a Monthly Mortgage Calculator
A simple mortgage calculator is all you need to illustrate how much this unnecessary markup of your mortgage rate is costing you. Suppose for example you are refinancing your home for $350,000 and your loan originator quotes you a daily mortgage rate of 6.75 percent. If you accept this mortgage quote your monthly payment on a thirty-year fixed rate loan will be $2,270. What the person arranging your loan has done behind your back is mark your mortgage rate up from 6.0 percent to get a 3 point commission from the lender.
That’s right… For every .25 percent that your mortgage broker overcharges you, the mortgage lender gives them a kickback of one point…three points in this example!
If you had gotten the mortgage rate you deserve at 6.0 percent your payment would only be $2,090…that’s $2,160 you’re overpaying every year because the mortgage broker cheated you. The good news is that you can avoid this unnecessary markup of your mortgage rate and pay a flat one percent origination fee for the person arranging your loan. This strategy for refinancing will save you tens of thousands in the long run because you’ll have a wholesale mortgage loan.
You can learn more about mortgage refinancing with a wholesale mortgage while avoiding unnecessary junk fees by registering for my Underground Mortgage Videos.
Here’s a sample of what you’ll get when you sign up today.
What is your opinion on refinancing through a credit union?
It really depends on the credit union. Some credit unions will give you awesome rates with bare bone fees while actually sticking around to service your home loan. Others turn around and sell your home loan to investors like a hot-potato charging you as much as possible. Ask questions and do your homework first.