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Wholesale Mortgage Rates

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If you are considering refinancing your California mortgage loan and would rather deal with a wholesale mortgage lender instead of your bank, you will need to enlist the help of a mortgage broker. Before choosing a mortgage broker you should negotiate with potential brokers and find one that agrees not to charge you Yield Spread Premium. Here are several tips to help you secure wholesale mortgage rates when refinancing your California mortgage.

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Yield Spread Premium is the retail markup of your mortgage interest rate for a commission. When you refinance with a mortgage broker the wholesale lender behind your loan qualifies you for a specific wholesale mortgage interest rate. Your broker marks your mortgage rate up because the wholesale lender pays them a bonus for every quarter percent you agree to overpay above the rate you qualified. This problem of Yield Spread Premium is magnified by the high cost of real estate in California.

Homeowners typically do not have access to wholesale lenders in California; however, once you find a mortgage broker that agrees not to charge you Yield Spread Premium you will have access to wholesale mortgage rates. Tell your potential mortgage brokers that you understand Yield Spread Premium and will not accept a mortgage that includes this markup. Let them know you will pay a reasonable fee for the origination and all necessary closing costs; however, you will not tolerate retail markup of your mortgage rate. If possible try and deal with the owner of firm you are dealing with when negotiating and make sure the mortgage broker is licensed in the State of California. You can learn more about refinancing with a wholesale lender in California, including costly pitfalls to avoid with our free Underground Mortgage Videos.

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{ 4 comments… read them below or add one }

Jefferson Otwell April 27, 2007 at 7:02 am

Brokers hitting consumers with Yield Spread Premium is one of the nastiest parts of the mortgage business. Employing an Upfront Mortgage Broker who is bound to his association to state upfront exactly how he or she is to be paid helps avoid this problem.

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rich November 12, 2007 at 8:11 am

I'm looking for a wholesale mortgage broker in Oregon – any listing of such companies?

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grace June 21, 2010 at 6:44 am

Currently have a 30 yr mortgage(200K) with suntrust and a 50K equity loan for interest only. Was thinking about refinancing and combining both into a 20yr or 15 yr mortgage. Should I keep the loans separate? or should I combine into a 250K primary loan? Have very good credit and both loans with suntrust. Should I find amortgage broker or stay with suntrust? any advice out there? Do you think rates will stay stable for a while?Located in Fl

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Patricia Torres July 2, 2013 at 5:46 pm

I have a loan with wells Fargo i pay still pay 7.25 total of 349.32 per month for a condo that I have a renter paying 900 income, I will be getting 1500 from DDSI hopefully very soon have almost perfect credit. But have not worked in past 5 yrs. I owe 42000 on a 50000 loan pls help

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