Are you in the process of refinancing your home mortgage loan and are searching the Internet for the best refinance interest rate?
You might not know something about the mortgage rate quotes you find online; something that could wind up costing you thousands of dollars. Here are several tips to help you find the best refinance interest rate and save yourself thousands of dollars in the process.
Best Refinance Interest Rate
What is the best refinance interest rate? Is it the lowest mortgage rate you can find online or is it the lowest rate that doesn’t include junk fees or markup to give the broker a commission? Did you know that mortgage brokers mark up mortgage rate quotes to get a commission from the lender while charging you a fee for originating the loan? This fee paid by the lender will often double, even triple your mortgage broker’s commission for arranging your loan. Does the mortgage broker arranging your loan deserve to make that much money from your loan? If the lender’s paying this extra fee to the broker why should you care?
It’s not the fact the lender pays this fee to your mortgage broker that should concern you; it’s why the lender is shelling out so much money that should worry you when refinancing your home loan. Why do mortgage lenders reward brokers for closing loans with higher than necessary mortgage rates? You might think that after closing on the loan your mortgage lender sits back and collects interest from your mortgage payments. That’s how they make their money right? In most cases, no that’s not how mortgage lenders profit from your loan. In fact, mortgage lenders make the majority of their profits by selling your loan to investors on the secondary market. Someone else services the loan and profits from your mortgage interest; in most cases it’s not the lender that you started with when refinancing.
What does all this mortgage mumbo jumbo mean for you? Mortgage lenders know that home loans with higher than market mortgage rates bring them a premium profit when sold to investors; this is why they reward mortgage brokers for locking and closing your home loan with a higher than necessary interest rate. This fee paid to your mortgage broker for overcharging you has a technical mortgage mumbo jumbo title and is called Yield Spread Premium by those in the business. If you want the best refinance interest rate for your next home loan you simply must avoid any and all Yield Spread Premium on your loan.
You Don’t Have to be a Financial Guru
Many homeowners are intimidated by the process of negotiating with a mortgage broker. You don’t have to be a financial guru to pull off refinancing your home loan with a mortgage rate that hasn’t been marked up to give the broker a commission… you just need to find the right broker. My Underground Mortgage Videos will show you exactly how to find and negotiate with the right mortgage broker to get the best refinance interest rate for your home.
You know finding the lowest mortgage rate when refinancing is important because the higher your mortgage rate, the higher your monthly payment will be. Here is an example to illustrate how this unnecessary markup of your interest rate by the mortgage broker drives up your monthly payment.
Suppose for example you are a California homeowner refinancing for $375,000. Your mortgage broker quotes you an interest rate of 5.75% and charges you an origination fee of 2.5%. This origination fee will cost you a whopping $9,375 at closing. Again, follow the RefiAdvisor system outlined in my Underground Mortgage Videos and you’ll find a mortgage broker willing to refinance your loan for a flat one percent origination fee saving yourself $5,625 in origination fees alone…. you should really register for these mortgage videos.
What about that mortgage rate of 5.75%? What your mortgage broker isn’t telling you and you’ll probably never find on your Good Faith Estimate is that the lender actually approved you for a mortgage rate of 5.25%; however, your broker marked it up to get that commission from the lender. Your lender pays the broker a commission of one point for every .25% they markup your mortgage rate. Remember that one point is defined as one percent of your mortgage loan amount. In this case the broker gets two points, or two percent of your loan amount for locking and closing your home loan with a higher than necessary mortgage rate. This is Yield Spread Premium on your home loan.
What does Yield Spread Premium do to your monthly mortgage payment? Spend a few minutes with a mortgage calculator and see for yourself. In this example on a 30 year, fixed rate mortgage at 5.75% your monthly payment will be $2,190. Had you gotten the mortgage rate you deserve at 5.25% your monthly payment would have been only $2,070. That’s a savings of $1,440 per year! Still not convinced that you need my Underground Mortgage Videos? In this example these mortgage videos would save you $7,065 the first year alone!
You can learn more about getting the Best Refinance Interest Rate without unnecessary markup to give your mortgage broker a commission by registering for my Underground Mortgage Videos. Register today and you’ll have immediate online access to the mortgage videos without downloading anything to your PC.