Mortgage Rates fell again today, down to 5.0% from yesterday’s 5.25%
…this is the lowest that mortgages rates have been since 2004.
Can you find a rate like this shopping online or from your bank? The short answer is no, never. Rate quotes you receive online all have retail markup and banks never quote wholesale rates. The only way to take advantage of this 5.0% mortgage rate is to find a broker willing to quote you a rate that does not include commission based markup. Here are several tips to help you find the right mortgage broker for the job.
What is Yield Spread Premium?
Mortgage lenders reward brokers for closing loans with above market interest rates. This broker rebate is paid because the lenders make a premium profit when the loans are sold to investors on the secondary mortgage market. Your mortgage broker receives one percent of your loan amount as a bonus for every quarter percent that you unknowingly agree to overpay.
Suppose you are in the process of refinancing your home for $250,000. The broker quotes you a mortgage rate of 5.75% and charges you an origination fee of one percent. What you mortgage broker isn’t telling you is that you actually qualified for a mortgage rate of 5% but they’ve marked it up to 5.75% for a commission. Your broker pockets $2,500 that you’re paying them for loan origination plus $7,500 from the lender for overcharging you. You get stuck paying thousands of dollars in unnecessary mortgage interest.
If you’re planning on refinancing and want that great 5% mortgage rate you’ll need to find a mortgage broker willing to work for the origination fee alone without charging you Yield Spread Premium. A reasonable amount to pay for loan origination is one percent of your loan amount and not a penny more. There are honest mortgage brokers out there willing to work for this much.
You can learn more about your mortgage refinancing options with a wholesale mortgage rate without paying lender garbage fees by registering for a free mortgage video tutorial. Register today for the videos while this is still a free offer.