Are you considering a new home loan and want the best refinance rates without paying junk fees? While it’s true that mortgage rates are at a five-month low now, junk fees can prevent you from realizing any savings from your new mortgage for years after you close. The Chairman of the Federal Reserve was recently quoted saying that homeowners are their best advocate for avoiding predatory lending when refinancing and the way to avoid overpaying is to do your homework. Here are several tips before you refi to help you get the best refinance rates for your next home loan without paying unnecessary markup or lender junk fees.
Shop for the Best Refinance Rates
How do you shop for the best refinance rates for your next home loan? Do you collect Good Faith Estimates from as many lenders as you can, comparing fees until the wee hours of the morning? The easiest way to make sure you’re getting the best refinance rates is to shop around for the right person to arrange your home loan instead of looking for the best refinance company.
Mortgage Broker Compensation
It’s important to understand how brokers are compensated to make sure your best refinance rates are not being marked up unnecessarily. Your mortgage broker gets paid for their work in only one of two ways. They can charge you a loan origination fee for arranging your home loan or they can accept compensation from the lender. Why not let the lender pay your broker fee and save yourself a couple thousand bucks?
The problem with lender paid compensation is that you’re accepting a higher interest rate in exchange for not paying the mortgage loan origination fee, which drives up your monthly payments meaning you’re no longer getting the best refinance rates. Find the right person to arrange your mortgage refinancing and it is possible to pay a flat fee of one percent for loan origination without any markup of your best refinance rates.
What About Lender Junk Fees?
There are a number of unnecessary charges you need to avoid and not all of them come from the lender. Many brokers try to slip unnecessary expenses past you in your HUD-1 Settlement Statement. You’ll want to carefully look at this document before closing to make sure you’re not overpaying. (Your HUD-1 is the last word when it comes to lender fees…the Good Faith Estimate is purely a work of fiction) Remember paying any unnecessary fees means it will take you that much longer to recoup your expenses before you realize any savings getting the best refinance rates.
Mortgage Brokers Guilty As Charged
What fees should you keep your eyes peeled for? Mortgage rate lock fees are a dead giveaway that you’re dealing with someone with less than ethical standards. Mortgage broker courier and loan processing fees should also be treated with a healthy dose of skepticism. My Underground Mortgage Refinancing Videos cover junk fees you’ll want to avoid in great detail allowing you to rest assured knowing that you’re not overpaying at closing, which can save you thousands of dollars.
You can learn more about getting the best refinance rates for your next home loan without paying unnecessary markup or lender junk by checking out my free Underground Mortgage Refinancing Videos.
Here’s a quick sample to get you started today… These mortgage refinancing videos are fast, easy to understand, and save the average homeowner $1200 a year…guaranteed.
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.
