Why VA Refinance Rates Are The Best Deal Going

Are you a vet that hasn’t taken advantage of VA refinance rates? If so, you’re missing out on the best deal going in mortgage loans. If you’ve already got one you could qualify for an Interest Rate Reduction Refinance Loan (IRRRL) to take advantage of low VA refinance rates. Here are the basics you need to know about VA refinance rates to take advantage of the financial benefits you earned by serving.

VA Refinance Rates Are Still At Record Lows

VA home loans are made by private lenders and guaranteed by the Department of Veteran’s Affairs. Like any home loan they come in several different types and your eligibility is based on how long you served or on your current duty status. Your VA loan eligibility can only be used for a home that you personally occupy. The program requires a decent credit score to qualify and offers VA mortgage rates for purchase as well as cash-out refinance.

The Interest Rate Reduction Refinance Loan Is a Gem

Once you’ve got a VA home loan one its best features is your ability to take advantage of VA refinance rates with the program’s Interest Rate Reduction Refinance Loan (IRRL). This is essentially a VA Streamline Refinance which allows you access to lower VA refinance rates without a credit check or home appraisal.

VA home loans are very similar to FHA home loans with the added benefit of not requiring you to carry mortgage insurance. FHA mortgage insurance can add hundreds of dollars to your monthly payment making these loans more suitable for homeowners with credit challenges.

IRRRL Basics You Need to Know

The most attractive feature of the VA streamline refinance is that you don’t need credit underwriting or a home appraisal. You can use an IRRRL to take advantage of VA refinance rates with a no-cost or no cash out of pocket home loan, meaning your new lender will roll all the costs into the balance of the new mortgage or pay your loan origination fee and other closing cost with yield spread premium.

Keep in mind if you choose the latter you’re giving up the lowest VA refinance rates in exchange for the lender paying your fees, which also means you’ll have a higher mortgage payment.

If you’re refinancing an existing Adjustable Rate Mortgage with fixed VA refinance rates keep in mind that your interest rate and payment amount could increase. Also, cash out refinancing is not allowed with the Interest Rate Reduction Refinance Loan and you must already have a VA mortgage on the property.

Many lenders offer IRRRL refinancing with term lengths of 15 or 30 years. Because lender participation in the VA guarantee program is voluntary for lenders you’ll find differences in what banks and lenders offer. It is possible that a lender might deny your application for IRRRL because lenders are not required to participate. Also, differences in closing costs like the loan origination fee make comparison shopping important for any VA home loan.

Comparison Shopping for VA Refinance Rates

Just because you’re getting VA refinance rates doesn’t automatically mean you’re getting a good deal.

In fact, the fees you pay closing on any home loan make or break the deal you’re getting. You’ll have to pay the VA a funding fee which is a percentage of your home loan based on your VA eligibility.

The fees you pay closing on your VA mortgage, regardless of the type are set by the lender and are not regulated by the VA. This includes any discount points, the loan origination fee and any junk fees the lender tries to slip past you.

The less you pay closing on your new home loan the more benefit you’ll get form VA refinance rates. Simple comparison shopping using the Good Faith Estimate will ensure you’re not overpaying at closing if you go about it correctly.

How to Shop for the Best VA Refinance Rates

Before you start shopping for a lender for your VA refinance it’s important to make sure your credit score is as high as possible. You can do this by making sure that your credit reports are accurate at AnnualCreditReport.com and by paying down the balances on your credit cards below 30% of your limit. Once you’re satisfied with your credit score you’re ready to start shopping for a lender.

Do you know which mortgage fees are required and how much is reasonable to pay at closing? Should you pay discount points and what about that loan origination fee?

Discount points are a relic of the 1980s when homeowners were paying for double-digit mortgage rates. Essentially you’re paying this fee to buy down your mortgage rates. For every discount point you agree to pay at closing you typically lower your interest rate by .25 percent. VA refinance rates are still near historical lows making discount points an unnecessary expense that chances are you’ll never recoup.

Despite this lenders advertise VA refinance rates that include discount points to make their offers seem more attractive, often burying the fees in impossibly small print.

When requesting VA refinance quotes make sure you’re getting zero discount point quotes

If you’re interested in seeing how paying discount points affects your monthly payment there is a table on page three of the Good Faith Estimate.

Loan Origination Fees & Yield Spread Premium

The most important fees you’ll want to focus on when shopping for VA refinance rates are found on page two of your Good Faith Estimate. Page two is all about understanding estimate settlement charges. Keep in mind that the fees found on your VA refinance quotes are only “estimates” and could change on your HUD-1 Settlement Statement.

Page two, box A, item one is the loan origination charge. This is the fee paid to the person or company arranging your VA home loan and most brokers will tell you that one percent is reasonable. This might be a reasonable amount; however, you can do a lot better. I’ve reviewed small community and military credit unions that charge as little as $400 for loan origination. Remember, the less you pay for the mortgage origination fee, the more benefit you get from VA refinance rates.

Item 2 of box A is any yield spread premium based on specific, quoted VA refinance rates. For the uninitiated, yield spread premium is a credit paid by the lender for accepting higher than market interest rates. This credit is used to pay the loan origination fee and other closing costs. Yield Spread Premium works like discount points in reverse. The lender pays you the credit because you’re accepting a higher interest rate meaning your payments will also be higher.

Should you accept yield spread premium to pay your closing costs? If you’re strapped for cash and can’t pay the fees yourself this might seem like your only option. Remember that you might also be able to roll these fees into your mortgage balance without agreeing to higher VA refinance rates.

The next section on page two of your Good Faith Estimate is box B, which details specific lender fees that you can and cannot negotiate. Comparing these fees from a variety of banks, credit unions and other lenders will give you a good idea of what’s reasonable allowing you to negotiate to pay less.

How to Protect Your Credit Score When Shopping for Refinance Rates

One last thing to keep in mind when requesting quotes for VA refinance rates. Make sure you’re giving the loan officer your Social Security number. This will ensure that you’re getting an accurate quote. Many homeowners refuse to give their Social Security number when shopping for VA refinance rates because they think they’re protecting their credit score. If you do this you’re relying on that loan officer’s best guess as to what interest rate you’ll qualify, which is almost always a waste of everyone’s time.

The trick to protecting your credit score from excessive inquires when shopping for VA refinance rates is to limit all of your quotes to a two-week period. (14 days) If you do this you’ll only get dinged for one mortgage lender inquiry on your credit report and will protect your credit score.

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You can learn more about getting the lowest VA refinance rates without paying unnecessary lender fees by checking out my free Underground Mortgage Videos.

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Here’s a quick sample to help you avoid paying too much closing on your VA mortgage loan…

Warning: Avoid Paying For Mortgage Refinance Rates

If you’re shopping for today’s lowest mortgage refinance rates you’ve already encountered a deceptive fee lenders use to boost their profits at your expense. If you fall for this fee it’s going to be more difficult, even impossible to break even on your out-of-pocket expenses. Here are several tips before you refi to help you avoid paying for today’s best mortgage refinance rates.

Save Thousands On Mortgage Refinance Rates

Refinancing with today’s best mortgage companies can slash hundreds of dollars from your monthly housing payment. The problem with paying for mortgage refinance rates is that it boosts your out-of-pocket expenses and if you’re unable to break even you’ll be losing money no matter how low your new interest rate.

What is this unnecessary fee you’re paying for mortgage refinance rates that I’m talking about?

Paying unnecessary lender discount points robs you of the benefit you’re getting from mortgage refinancing.

Spend any amount of time shopping for mortgage refinance rates and you’ll find that lenders quote interest rates including discount points first. If you’re not already familiar with discount points this is a form of prepaid interest you pay at closing to lower your mortgage refinance rates. One discount point is one percent of your home loan and typically lowers your interest rate by .25%.

Should You Pay Discount Points?

Refinance rates are at 60 year lows and keep falling lower. Should you pay the lender a fee to get even lower mortgage refinance rates? For many homeowners who do not have cash on hand this isn’t a question; however, many make the mistake of thinking discount points put them ahead of the game.

You can answer this question for yourself by approximating the break-even-point for recouping your closing costs. You can do this by dividing your total closing costs including points by the amount your monthly payment will go down each month. This gives you (approximately) the number of months it’s going to take to break even on your out-of-pocket expenses before you’ll benefit from today’s low refinance rates.

Notice that I say approximate because this calculation is only valid if you keep the same term–length or go shorter. If you choose a longer term length like going from a 15-year home loan to a 30-year loan you’ll never break even due to the higher finance costs.

Here’s an example to illustrate my point:

Suppose you’re refinancing your home for $250,000. Your old payment based on an interest rate of 6.5% was $1,580 per month. The lender is quoting you mortgage refinance rates at 4.0% with half a point paid up front. This would lower your monthly payment to $1,200 per month at a cost of $1,250 for that half point. This is paid in addition to average closing costs of $5,000.

Is it worth paying $1,250 extra for the discounted rate?

If you don’t pay discount points in this example the refinance rate will be 4.5% with a monthly payment of $1,266. That’s a difference of $66 per month. It will take you an additional 18 months to break even recouping the discount points you’re paying. Since it’s going to take you 16 months to break even recouping your $5,000 in closing costs, that’s a total of 34 months.

Is your cash better spent on other things? Considering that the average homeowner refinances every four years that’s up to you to decide.

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You can learn more about paying less for mortgage refinance rates from today’s best mortgage lenders by checking out my free Underground Mortgage Videos.

  • Underground Mortgage Videos
Here’s a quick sample to get you started with the lowest refinance rates without unnecessary points or fees…

Best Mortgage Rates

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.

Best Mortgage Refinance Rates

If you’re in the market for a new home loan you’re probably searching the Internet for Best Mortgage Refinance Rates. There are a couple things you might not know about the rate quotes you find on the Internet that could hurt you when refinancing.

Did you know that 98% of all mortgage quotes you find online have someone’s commission built into them? These quotes could wind up costing you thousands of dollars unnecessarily without you even knowing it. Here are several tips to help you avoid these hidden mortgage rate commissions and get the best mortgage refinance rates for your next home loan.

Best Mortgage Refinance Rates

What are the best mortgage rates when refinancing your home loan? Could you spot a par mortgage rate if you found one? Do you know what a par mortgage rate is? Here’s the simple definition of a par mortgage rate: it’s one that does not cost money for you or create money for the person arranging your loan. That’s the secret your mortgage broker doesn’t what you to know about.

What do I mean by a mortgage rate that doesn’t costs money to get? That’s easy, you’ve heard of discount points right? Discount points are a fee you have to pay at closing to get a specific mortgage rate. One point is usually one percent of your loan amount. A par mortgage rate does not require that you pay any discount points to qualify…that’s a good thing. What about creating money? That’s the hidden commission you’ve probably not heard of. Did you know that your mortgage broker earns a commission from the lender for marking up your mortgage rate? This hidden commission could easily result in your overpaying thousands of dollars every single year you keep your loan.

Hidden Mortgage Broker Commissions

Your mortgage broker is compensated for their work in two ways. The broker can charge you a fee known as a loan origination fee. This fee is usually disclosed up front and can be found on your Good Faith Estimate. A reasonable amount to pay for loan origination is one point, or 1% of your mortgage amount; however, many greedy brokers charge as much as 3-5% of your loan amount. You should never agree to pay this much for a broker’s services…in fact, if you follow the RefiAdvisor system outlined in my Underground Mortgage Videos you can easily find a mortgage broker willing to work for a one percent origination fee.

So what about this hidden commission? It’s called Yield Spread Premium and is single handedly responsible for American homeowners overpaying sixteen billion dollars this year alone according to the US Department of Housing and Urban Development.

What Is Yield Spread Premium?

Yield Spread Premium is a hidden commission created for your mortgage broker when they lock and close your new mortgage loan with a higher than necessary mortgage rate. Higher than necessary means they mark up the mortgage rate your lender approved you to get a commission from that lender…it’s really that simple. Most mortgage brokers will not talk about Yield Spread Premium and leave it off the Good Faith Estimate completely. Many mortgage brokers become defensive, even angry when you question them about Yield Spread Premium, and why wouldn’t they…

This hidden commission often doubles, even triples their compensation for arranging your home loan. You might be asking yourself why Yield Spread Premium is a problem…the fee isn’t coming out of your pocket, the lender pays it right? While it’s true that the lender is paying Yield Spread Premium, you need to consider why the lender is paying your broker to mark up your mortgage rate.

Banks and mortgage lenders make the majority of their profits selling their loans to investors. That’s right, banks are part of the problem here too…you cannot avoid Yield Spread Premium simply by refinancing your home loan with a bank to cut out the mortgage broker. Banks are just as guilty of ripping people off as the dirtiest mortgage broker out there; however, due to a little known loophole in the Real Estate Settlement Procedures Act it’s perfectly legal for your bank to rip you off AND they don’t even have to disclose what they’re doing. Perfectly legal and perfectly sleazy…if you refinance your home mortgage with a bank or credit union you will overpay…guaranteed.

So how do you get the best mortgage refinance rates? You simply have to find the right mortgage broker willing to work for a one percent origination fee without taking Yield Spread Premium on the loan. This isn’t as difficult as you might think and you don’t have to be a financial guru to pull it off. In fact, if you have one hour to invest with the underground mortgage videos on this website, you’ll learn everything you need to know and have the tools you need to pull it off in one place.

Still Not Convinced?

Once you find the right mortgage broker you’ll have access to Par Mortgage Refinance Rates and will save thousands of dollars every year that you keep the loan. Still not convinced? Here’s an example to illustrate how this hidden commission known as Yield Spread Premium drives up your mortgage payment unnecessarily. Suppose for example you are refinancing your California mortgage loan for $350,000. Your mortgage broker quotes you a rate of 5.75% and charges an origination fee of two points. Remember, one point is one percent of your loan amount…in this example the origination fee is two percent, or $7,000.

Two percent is double what you could have paid had you signed up for my underground mortgage videos, but not registering today won’t be the first mistake you make on this loan. Take a look at that mortgage rate your broker quoted you…what you don’t know is that the lender actually approved you for a mortgage rate of 5.25% but the broker marked it up to 5.75% to get a commission from the lender. In this example the lender pays a commission of 2 points, or an additional $7,000 to the broker for marking up your mortgage rate, doubling the mortgage broker’s commission on your loan.

What does the lender get for their money? You agree to a loan that is .50% higher than it needed to be…big deal, half a percent isn’t that much right? Let’s take a look at what .5% does to your mortgage payment. Your monthly payment on a 30 year, fixed rate mortgage at 5.75% would be about $2,053 per month. If you had only watched my Underground Mortgage Videos and got the mortgage rate you deserve at 5.25% your mortgage payment would only be $1,930…that’s a difference of $1,476 you’re throwing away every year!

If only you’d have registered for my Underground Mortgage Videos you’d have saved yourself $7,380 after five years…

You can learn more about finding the best mortgage refinance rates that don’t have this hidden commission known as Yield Spread Premium or lender junk fees by registering for my Underground Mortgage Videos available on this website.