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Are you searching the web for a home loan comparison before purchasing or refinancing your existing mortgage? Do you know how to use that home loan comparison to avoid paying unnecessary markup and junk fees? Did you know that many of homeowners, including many of your neighbors got a false sense of security from a home loan comparison only to pay unnecessary markup? Here are several tips to help you use a home loan comparison to save thousands of dollars on your next mortgage loan.

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Home Loan Comparison Mistakes

Many homeowners shop for mortgage loan simply by collecting Good Faith Estimates and trying to make a home loan comparison based on fees. Using Good Faith Estimates in this manner results in overpaying every time because it doesn’t take into the consideration the hidden markup built into nearly every mortgage quote you collect. This hidden markup I’m referring to is a little known charge called Yield Spread Premium that doesn’t come out of your pocket directly; however, this insidious fee drains thousands of dollars from your bank account for no good reason.

How can you avoid this hidden markup? Before I can answer that question you need to know how to recognize this hidden markup for Yield Spread Premium. What is Yield Spread Premium? Simply put, Yield Spread Premium is a fee mortgage lenders pay loan originators for locking and closing your home loan with a higher than necessary mortgage rate. Think of Yield Spread Premium as an incentive for overcharging you. Take the incentive out of the equation and you’ll not only get the mortgage rate you deserve but you’ll avoid paying junk charges at the same time.

Avoiding Yield Spread Premium

I’ve mentioned that comparison shopping alone cannot help you avoid Yield Spread Premium. This is because many brokers have clever ways of disguising their markup. You’ll need to shift your mindset from comparing loan offers to comparing loan originators. Find the right person to arrange your mortgage and you won’t have to worry about home loan comparison or junk fees.

How to Find the Right Mortgage Broker

Finding the right person to arrange your next mortgage is easier than you think. Start by telling prospective brokers that you understand how mortgage spread premium works and will not accept any home loan that includes the markup. Offer to pay them a reasonable fee for loan origination of one percent but tell them you will not accept any home loan that includes the markup. Once you’ve found the right person you’ll avoid this hidden markup and many of the fees brokers try and slip past up you with their home loan comparison.

You can learn more about finding the right person to arrange your next home loan without paying markup or junk fees by checking out my free Underground Mortgage Videos.

Here’s a sample to get you started by cutting a hundred dollars or more from your next mortgage payment.

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{ 2 comments… read them below or add one }

Alex Monroe July 6, 2010 at 7:49 am

Awesome post. There are a lot of techniques for people to save on mortgage. It is all about finding the best deal possible in the market. From the extensive selections of program that's available, and also may suit your need, there is a higher chance we can often find a deal that we will never regret.

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james wetherbee October 6, 2010 at 4:19 pm

It's a great idea and I agree with you Alex. People at this really looking for the best deal wherein it could be a great help on their part.

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