Are 30-year mortgage refinance rates really under 4% for the first time in history or is your lender pulling a fast one trying to get you to fork over more cash for your refi? Mortgage lenders advertise ultra-low teaser rates propped up with discount point that you pay at closing. Here’s an article by Dan Green of TheMortgageReports.com explaining why this most recent drop in refinance mortgage rate is only an illusion:
Sub-4 Percent Mortgage Rates?
Here’s the thing, though. Rates aren’t any lower this week than last. Rates didn’t all-of-a-sudden dip below 4 percent. What you’re seeing in the headlines is lender sleight-of-hand. Rates did fall below 4 percent, but at the same time, the required discount points to get that rate rose. Discount points, of course, are prepaid interest to the bank. They’re called “discount points”, in part, because they get you a discount on your mortgage rate.
It’s true that refinance mortgage rates are at all-time historic lows and lenders are doing everything they can to profit by charging junk fees. Loan originators are doing the same thing by overcharging their loan origination fees by as much as 3% when 1% is a perfectly reasonable mortgage broker fee.
How do you know which closing costs on your Good Faith Estimate are junk fees? Start by looking for anything that resembles a rate lock fee. If you’re being charged a fee for locking your refinance mortgage rates it’s a sure sign that you’re dealing with a dishonest broker and should look elsewhere. Other common junk fees include courier fees, processing fees, and application fees.
You can learn more about getting today’s best mortgage refinance rates without paying one red cent more than necessary by checking out my free Underground Mortgage Videos.