Are you searching for low home refinance interest rates but are concerned about hidden junk fees and markup? Did you know that according to the Secretary of Housing and Urban Development homeowners in the United States will lose sixteen billion dollars this year to junk fees and unnecessary markup of their home refinance interest rates? Here are several of my best tips for finding the lowest home refinance interest rates while avoiding the mortgage fat cats and their hidden fees.
Best Home Refinance Interest Rates
How do you shop for a new mortgage loan? Most of your neighbors approach their refi like they’re shopping for a new television. They call up the big box electronics stores or go online and start comparing prices. Makes sense when you’re buying a television, but what about refinancing your mortgage loan? One thing nearly all of your neighbors don’t know about their refi is that almost all of the mortgage quotes you get online or from banks and brokers have been marked up to create a profit for the person or company arranging that loan.
This unnecessary markup of your home refinance interest rates results in paying a higher than necessary mortgage payment every month that you keep the loan. Not just a little bit, this markup drains hundreds of dollars per month from your wallet. What is this unnecessary mortgage markup? I’m talking about a fee affectionately known to the mortgage fat cats as Yield Spread Premium. This a fee paid by lenders to any loan originator who locks and closes home mortgages with higher than necessary home refinance interest rates. You see, some people compare mortgage rates to retail products like televisions. Because home refinance interest rates come from wholesale lenders, with the exception of banks of course, many brokers mark them up to collect Yield Spread Premium from the lender.
Mortgage Broker Mischief
The problem with this unwanted and unnecessary markup of your mortgage rate is that you’re already paying the person or company arranging your mortgage a perfectly reasonable origination fee for their work. The broker is helping themselves to this “lender paid” compensation at your expense. Many brokers tell you not to worry about this fee because it’s not coming out of your pocket; however, what they’re failing to tell you are the reasons the lender is paying them this fee. Mortgage lenders pay Yield Spread Premium for higher than necessary home refinance interest rates because these loans bring them premium profits when sold to investors. This is how mortgage lenders make the majority of their profits.
How to Avoid Junk Fees and Markup
You can avoid this unwanted markup of your home refinance interest rates and junk fees on your next refi. It’s easier than you think and you don’t have to be a finance guru to pull it off, you just have to find the right sort of broker to arrange your home loan. Start by telling potential brokers that you’re familiar with Yield Spread Premium and will not accept any home refinance interest rates that include the markup. Offer to pay a reasonable loan origination fee of 1% and you’ll be on your way to cutting thousands of dollars worth of fat from your next refi.
You can learn more about getting the lowest home refinance interest rates while avoiding the mortgage fat cats with my free Underground Mortgage Videos.
Check out this short mortgage video that exposes your lender’s dirty, not-so-little secret…