If you are considering taking advantage of this month’s low mortgage rates but don’t want to pay too much when refinancing there are several things you need to know about the rate quotes you receive. Here are several tips to help you make sense of it all and avoid paying too much when refinancing your home loan.
Today’s 30 year fixed mortgage rate is 5.5% with .5% of Yield Spread Premium.
You won’t get this rate just by calling up your bank or going to a site like Lending Tree. This is as close as a wholesale rate that is available today and you have to go through a mortgage broker to get this rate without paying excessive points or fees.
You might not be familiar with Yield Spread Premium; this is the fee that inflates your mortgage rate to create a commission for the person arranging your loan. This artificial markup of your mortgage rate can be avoided if you understand mortgage rate sheets. You can get your hands on the lenders current rate sheet by asking to see it the day you lock your rate. An honest mortgage broker will show you the lenders rate sheet; dishonest brokers make excuses telling you that the rate sheets are “proprietary” and “confidential.”
If you want a wholesale or “par” mortgage rate you just have to learn how mortgage loans are priced using the lender’s rate sheets. Keep in mind that mortgage rate sheets change on a daily basis and that you are trying to avoid the markup of your mortgage rate to create unnecessary commission.
You can learn more about avoiding this unnecessary markup of your mortgage interest rate and other junk fees by registering for the free video tutorial found on this web site.
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.
