If you’re considering refinancing your home mortgage you may be concerned about how to refinance without getting ripped off. According the Secretary of Housing and Urban development homeowners in the United States overpay nearly sixteen billion dollars every year in the form of junk fees and unnecessary mortgage rate markup.
Here are several tips to help you refinancing your mortgage without paying too much for your next home loan.
Beware Yield Spread Premium
There is one mortgage “secret” you need to know about in order to prevent yourself from being ripped off by your mortgage Broker. Mortgage lenders pay brokers to markup your mortgage rate with a commission known as “Yield Spread Premium.” Simply put, Yield Spread Premium is a percentage of your mortgage amount created when the mortgage broker locks and closes your loan with a higher than necessary mortgage rate. This means you could have refinanced your mortgage for less…in most cases much less.
How Yield Spread Premium Drives Up Your Payment Amount
Suppose you need to refinance your Adjustable Rate Mortgage because the lender will soon reset the loan and raise your payment amount. You need $250,000 to pay off the old mortgage including the prepayment penalty from your former lender. Your mortgage broker tells you that you qualify for a 6.5% mortgage rate and will “only” charge you 2% for the origination fee.
What your mortgage broker isn’t telling you is that you qualified for a 5.5% mortgage rate and they’ve marked it up to 6.5%…that’s a full point just to get a commission from the lender. How does this markup affect your mortgage payment? Had you gotten the mortgage rate you qualified for your monthly payment on a 30-year fixed rate loan would have been only $1400. Since your broker ripped you off in this example your payment will be $1,580! That’s an extra $2,160 you’re paying unnecessarily every year you keep this mortgage.
How to Refinance Without Yield Spread Premium
It is possible to refinance your mortgage without paying this unnecessary markup of your mortgage rate. If you follow the system outlined in the free videos on this website you will be able to refinance your home loan paying a flat fee of 1.0% to the mortgage broker without any commission based markup of your mortgage rate. This allows you not only to take advantage of wholesale mortgage rates but the free videos show you how to avoid lender junk fees in the process, saving you thousands of dollars at closing. Register today, the mortgage videos are yours free with no obligation.
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.
just came across. Nice blog