Are you searching online for the lowest home loan refinance rates and find that everyone claims to have the best rates but their loan offers are loaded with suspicious fees and cryptic disclosures? The internet can be an excellent tool for finding home loan refinance rates once you cut through the BS and find an honest mortgage broker to arrange your next home loan. Here are several tips to help you get the lowest home loan refinance without paying unnecessary markup or junk fees.
Best Home Loan Refinance Rates
What are good home loan refinance rates and do you know how to recognize junk fees and commission based markup? Most homeowners have never heard of commission based markup of their home loan refinance rates or the fee lenders pay for closing home loans with higher than necessary interest rates. This fee I am talking about is known as Yield Spread Premium and if you can avoid this unnecessary fee you’ll get the best home loan refinance rates without paying junk fees.
Avoiding Yield Spread Premium
How does Yield Spread Premium work and what does this unnecessary markup do to your mortgage payment? Yield Spread Premium is actually a fee paid by mortgage lenders to loan originators who lock and close home loans with higher than necessary interest rates. It doesn’t matter if your loan originator is a mortgage banker, broker, or an internet mortgage mogul, these loan originators typically receive one percent of your home loan amount for every .25 percent they markup your interest rate.
Banks aren’t required by law to disclose their markup of your home loan refinance rates so it’s almost always better just to avoid banks altogether when refinancing. Mortgage brokers on the other hand are required to disclose this fee; however, they always have clever ways of explaining their fees away. After all, it’s not coming out of your pocket right? Why should you care about a fee that’s not coming out of your pocket?
The problem is not who’s pocket the fee is coming out of but why the fee is being paid. Mortgage lenders don’t make the majority of their profits by sitting around collecting interest from your home loan payments. On the contrary, mortgage lenders make most of their profits by selling your home loan to investors on the secondary market. Lenders know that home loans with higher than necessary mortgage rates bring the highest profits from investors, this is why they reward originators who take advantage of people with Yield Spread Premium.
Wholesale Home Loan Refinance Rates
Avoid the commission based markup of your home loan refinance rates and you’ll have a wholesale or par mortgage rate. Par simply means you don’t pay discount points and there is no markup for Yield Spread Premium, which is the lowest possible interest rate available on any given day. So how can YOU get a par home loan refinance rate for your next mortgage loan? Getting wholesale rates is easier than you think. Check out my free Underground Mortgage Videos and I’ll show you how in five easy steps.
Register for my free Underground Mortgage Videos today. It’s quick, easy, and these videos could save you as much as $1200 per year for just 45 minutes of your time.
Here’s a short sample to get you started. This video exposes more of the truth about what mortgage fat cats call Yield Spread Premium.
This blog is really helpful…thanks everyone!
Great article. There is a lot of information here that every home owner should know.