If you’re in the process of shopping for current 30 year mortgage rates to purchase your home or refinance an existing home loan there are several things you need to know to avoid paying too much for your next home loan. Did you know that the person arranging your home loan receives a commission for marking up your interest rate? This unnecessary markup in addition to the origination fee you’re already paying results in a higher than necessary mortgage payment and less cash in your pocket every year that you keep the loan. Here are several tips to help you avoid this unnecessary markup when shopping for current 30 year fixed mortgage rates.
Yield Spread Premium
Don’t worry if you’ve never heard of Yield Spread Premium, most of your neighbors haven’t either and that’s why nearly all of them are paying too much for their home mortgage loans. The simplest definition of Yield Spread Premium is a cash percentage of your home loan amount paid by your lender to the person arranging your home loan for locking and closing with a higher than necessary interest rate. Mortgage brokers and other loan originators work from rate sheets that quote interest rates with varying degrees of Yield Spread Premium. Much like a used car salesman, many brokers quote interest rates based on what they think you’ll fall for, not the lowest mortgage rate you qualify.
Current 30 Year Mortgage Rates
How do you find the lowest 30 year mortgage rates when shopping for a home loan? Getting mortgage rate quotes is easy; however, getting a mortgage rate quote that doesn’t include Yield Spread Premium can be tricky. Nearly all of the mortgage companies and brokers you’ll encounter, even banks quote interest rates that have been marked up in some fashion to boost their bottom line at your expense. What you’re looking for when searching current 30 year mortgage rates is what’s known as a Par Mortgage Rate. Par means the interest rate has not been marked up to create a commission for the broker and you do not have to pay discount points to qualify. You’ll still have to pay the mortgage broker an origination fee for their work on your home loan; however, this up-front fee won’t drive your mortgage payment up unnecessarily.
How to Get Wholesale Mortgage Rates
Par mortgage rates are also known as wholesale mortgage rates and getting one isn’t as tricky as you think. Banks and large brokerages don’t offer wholesale mortgage rates to their customers; their overhead simply won’t allow it. Your best bet for getting a wholesale mortgage rate is to find a self-employed mortgage broker. Find one working out of their home? Even better…these mortgage brokers don’t have expensive overhead that comes from employing a sales staff and working out of posh office spaces…costs that are ultimately passed on to you in higher interest rates and fees.
When shopping for current 30 year mortgage rates start with local mortgage brokers. Tell them you understand how Yield Spread Premium works and will not accept any home loan that includes this markup. Offer to pay a reasonable loan origination fee of one percent for the mortgage broker’s services and you’ll be on your way to getting a wholesale mortgage rate for your next home loan.
You can learn more about finding current 30 year fixed mortgage rates that don’t include markup or junk fees by checking out my free Underground Mortgage Videos.
These money-saving mortgage videos are yours totally free… Here’s a sample to show you more about avoiding unnecessary mortgage rate markup and junk fees for your next home loan.
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.
