If you’re thinking about refinancing your home mortgage loan you’ll want the best mortgage rates you can get for the new loan. Did you know that 99% of your neighbors are overpaying for their home loans because they went shopping for the best mortgage rates the wrong way? Here are my favorite tips and tricks to help you get the best mortgage rates when refinancing your home mortgage loan without paying any junk fees or markup.
Getting The Best Mortgage Rates Online
Getting the best mortgage rates on the Internet is trickier than you think. What you don’t know about every mortgage quote you find online or get from your local mortgage company is that the mortgage rates have all been marked up to create an “extra” commission for someone. If you want the best mortgage rates when refinancing your home loan you’ll have to find one that hasn’t been marked up. Why are mortgage rates marked up for this commission? Mortgage lenders pay a kickback for home loans that close with higher than necessary mortgage rates because these home loans bring them premium profits when sold to investors on the secondary mortgage market. Mortgage lenders don’t care that this markup drives up your payment by hundreds of dollars per month unnecessarily; these companies are motivated only by greed and their bottom line. If you want the best mortgage rates for your home loan you need to know that the mortgage lender and broker are not looking out for you; judge every loan offer with a healthy dose of skepticism and you’ll be on your way to actually getting the best mortgage rates.
Mortgage Rate Markup
What is this markup of your mortgage rates that drives your payment up unnecessarily? The fee paid by wholesale lenders for mortgage loans that are locked and closed with higher than necessary mortgage rates is called Yield Spread Premium. Provided you don’t refinance your home with your bank, the person arranging your home loan receives one percent of your loan amount for every .25 percent they markup your mortgage rate. Yield Spread Premium is paid in addition to any fees you’re paying for loan origination to the mortgage company or broker arranging your home loan.
Refinance Mortgage Rates
Here’s a quick video about finding the lowest
mortgage rates when refinancing your home loan online.
Before you go saying you’ll just avoid all this Yield Spread Premium nonsense by refinancing with your bank, you should know that while banks don’t collect Yield Spread Premium on their loans they do collect a profit margin known as Service Release Premium when your home loan is sold to investors on the secondary market, just like wholesale lenders. Your bank is also exempt from the Real Estate Settlement Procedures Act, meaning they don’t have to disclose their profit margin or markup on your home loan. Banks markup their mortgage rates just like mortgage brokers because they make a premium profit selling your home loan later on. Your bank will never tell you they’re doing this because all they’re required to give you prior to closing is a Good Faith Estimate and Annual Percentage rate, both of which are based on low-balled fees given in “good-faith.” You’ll never get the best mortgage rates refinancing your home loan with your bank.
How to Get the Best Mortgage Rates
Getting the best mortgage rates when refinancing your home isn’t as difficult as you think; you don’t have to be a financial guru to get the best mortgage rates, you just have to find the right person to arrange your loan. Shopping for a mortgage loan isn’t like shopping for a new television or kitchen appliance; comparing mortgage quotes from dozens of lenders will only get you the best of the worst home loans available and this is why most of your neighbors pay too much for their mortgage loans.
Finding the right person to arrange your next home loan means finding an independent mortgage broker willing to work for a flat origination fee without marking up your mortgage rate for Yield Spread Premium. Finding the right mortgage broker can be tricky because many brokers are unwilling or unable to negotiate the kind of deal that doesn’t include Yield Spread Premium because of their overhead costs. Mortgage brokers working out of posh office spaces that employ expensive sales staff will generally not agree to home loans that do not include Yield Spread Premium.
How do you find the right mortgage broker to give you the best mortgage rates? Remember that only mortgage brokers have access to wholesale mortgage rates and this is your goal for refinancing with the best mortgage rates. The best mortgage rates on any given day are going to be as close to “par” as you can get them. Par mortgage rates is a term meaning you don’t have to pay discount points to qualify for a specific mortgage rate and of course that the mortgage rate does not create Yield Spread Premium for the mortgage broker arranging your loan. A discount point is the equivalent of one percent of your loan amount and is a fee due at closing. Mortgage rates are still very low and the benefits of paying discount points are far less than they used to be in the 1980s when mortgage rates were much higher than they are today. In most cases you will want to avoid paying discount points whenever possible.
Getting back to finding the right mortgage broker to arrange your home loan with a par mortgage rate, you want to look for the smaller, self-employed mortgage brokers that don’t have expensive overhead therefore avoiding junk fees and mortgage rate markup. Start by telling potential mortgage brokers that you understand how Yield Spread Premium works and will not take a home loan that includes the markup. On the subject of junk fees there are several closing costs that you’ll want to avoid when refinancing your home loan. Junk fees are the subject of my Underground Mortgage Videos; however, finding certain fees in your loan documents is a dead giveaway that you’re dealing with a dishonest mortgage broker. The number one red flag you need to keep an eye out for when refinancing your home is the mortgage rate lock fee. This is a classic example of a mortgage junk fee that serves no purpose other than boosting your mortgage broker’s profit. Mortgage lenders do not charge rate lock fees. If your mortgage broker claims there are rate lock fees you can be 100% certain you are dealing with a dishonest mortgage broke and need to find someone else to arrange your home loan.
You can learn more about avoiding mortgage junk fees and getting the best mortgage rates when refinancing your home loan by checking out my free underground mortgage refinancing videos.
Here’s a sample of what you’ll get when you register today. This video is about your mortgage lender’s dirty secret when it comes to marking up your mortgage rate. These underground mortgage videos are yours free and stream to you online with nothing to download to your home computer.