According to Freddie Mac 95% of mortgage refinancing this year has been with a fixed-rate home loan. If you’re considering a mortgage refi and want the best refinance company for your next home loan there are several things you should know about rate shopping before you sign. This article at Housing Predictor explores your options for refinance with a fixed interest rate this year.
Nervous about their financial futures and holding on to their homes, consumers are shedding debt and transitioning to fixed rate mortgages in unprecedented numbers. An over-whelming 95% of refinances were fixed rate mortgages during the first quarter of the year, according to Freddie Mac.
If you’re shopping around for the best refinance rates for your mortgage refi you need to know about important changes to the ways brokers are compensated that went into effect this year. It used to be that your broker could charge you a loan origination fee for arranging your mortgage refi and take a kickback from the lender for marking up your interest rate. The fee lenders pay the broker for overcharging you is called Yield Spread Premium; don’t worry if you’ve never heard of this fee, the rules have changed in your favor once you know how to take advantage of them.
It’s important not to let a fast talking broker convince you to let your lender pay the brokers fee for arranging your home loan. The reason you want to pay the mortgage origination fee yourself is that in exchange for paying this fee you’re accepting a higher interest rate meaning you’re no longer getting the best refinance rates which will drive up your payments for the entire duration of your home loan.
There are a number of junk fees you’ll want to avoid paying when mortgage refinancing. The fees you pay determine in part how good of a deal you’re getting on your refi because you have to recoup these expenses before you realize any savings from the lower mortgage rates. You can learn more about avoiding unnecessary fees and markup by checking out my free Underground Mortgage Refinancing Videos.