Are you looking for a new home loan and want the best home mortgage refinancing company? Did you know that according to the Secretary of Housing and Urban Development your friends and neighbors in the States will overpay sixteen billion dollars for their home loans this year alone? Here are several of my best tips for finding a home mortgage refinancing company that won’t charge you junk fees or slip hidden markup into your next home loan.
Home Mortgage Refinancing Company 101
Should you choose a home mortgage refinancing company for your next home loan or just refinance with your bank? Bank originated home loans are fast and convenient; however, what you don’t know about your bank could cost you. First of all, banks are exempt from the Real Estate Settlement Procedures Act, which requires lenders to disclose their markup and profit margin on your home loan. If you don’t care about that and want the convenience of a bank originated home loan then read no further; however, if you want the lowest possible mortgage rate without junk fees RESPA is important to understand.
In the 1990s the Banking Lobby in the United States successfully lobbied Congress to have RESPA laws changed excluding your bank from legislation that protects American homeowners from predatory lending practices. Your bank is only required to give you an Annual Percentage Rate based on their marketing department’s fictitious Good Faith Estimate. If you love your bank you might think about taking out a mortgage from them; however, why would you consider any lender that doesn’t have to play by the rules in place to protect you from abuse?
Mortgage Yield Spread Premium
Another term you need to be familiar with before choosing a home mortgage refinancing company is Yield Spread Premium. This is a fee lenders pay to any broker that locks and closes your home loan with a higher than necessary mortgage rate. Mortgage lenders do this because they know home loans with higher than market interest rates bring them a premium profit when sold to investors on the secondary market. Think of Yield Spread Premium as an incentive and a kickback from the lender for overcharging you. You can find this lender paid compensation on your HUD-1 settlement statement; however, most brokers have clever ways of explaining this compensation away.
You Can Get Wholesale Mortgage Rates
Most mortgage brokers will tell you that you can’t get wholesale rates from your home mortgage refinancing company because they don’t want to give up this extra commission paid by the lender for overcharging you. Truth be told, it is possible to pay a flat origination fee of one percent to get a mortgage rate that hasn’t been marked up for Yield Spread Premium without paying junk fees. You just have to find the right broker to arrange your new home loan with the best home mortgage refinancing company. You don’t have to be a personal finance guru or have a relative in the business to get the kind of deal I’m describing here; you just need to find the right person for the job.
You can learn more about finding the best mortgage refinancing company without Yield Spread Premium or junk fees by checking out my free Underground Mortgage Refinancing Videos.
Here’s a quick sample to get you started mortgage refinancing with wholesale rates today.