Refinancing a Mortgage Without Losing Your Shirt

Are you thinking about refinancing a mortgage but want to avoid paying unnecessary fees or lender markup? One of the most common mortgage mistakes is focusing on getting the lowest refinance mortgage rates from lenders like Amerisave at the expense of closing costs. Unnecessary fees and markup when refinancing a mortgage makes it difficult (if not impossible) to recoup your expenses, making your new home loan a losing proposition. Here are several tips before you refi to help you get the best refinance mortgage rates without paying lender junk fees.

Refinancing a Mortgage Online

The Internet is an excellent tool for getting quotes for refinancing a mortgage loan; however, there is a lot of bad advice online that could cost you thousands of dollars. One example of terrible advice commonly given by financial advisors is the two percent rule of refinancing a mortgage. This archaic “rule” states that you should never consider refinancing a mortgage unless the new interest rate is at least two percent lower than your old rate. This is bad advice because there are many perfectly good reasons for refinancing a mortgage that don’t always lower your payment amount. Also, it is possible to recoup your out-of-pocket expenses refinancing a mortgage with less than a two percent decrease in your interest rate.

Rather than basing your decision for refinancing a mortgage on some financial advisor’s bad advice, it makes more sense to test your options on a cost/savings basis. You can do this for yourself by determining how much you’ll save each month based on your new payment amount. The difference between your new mortgage payment and old payment is your savings. Assuming you’re refinancing a mortgage to lower your payment, subtract your new payment from the old and you’ve got your savings.

How Much Will Mortgage Refinancing Cost You?

Every home loan has fees that need to be paid at closing. Those no fee refinance offers aren’t really free, you’re simply accepting a higher mortgage rate with prepayment penalties in exchange for the lender paying your closing costs. You can also expect to pay a mortgage origination fee to the broker or company arranging your new home loan. The best place to find out how much a new home loan will cost you is with the HUD-1 Settlement Statement. Don’t rely on the Good Faith Estimate to compare lender fees as this is little more than a marketing tool used by lenders to market their loan offers. The last word on fees, including the loan origination fee is on your HUD-1.

Don’t be afraid to question anything you find on your HUD-1 statement. Did you know that all of your out-of-pocket expenses are negotiable and vary among lenders like Amerisave and Wells Fargo Refinance? Spend a little time being that difficult homeowner haggling over fees and you can quickly save yourself hundreds, even a thousand dollars out-of-pocket at closing.

When Does Refinancing a Mortgage Make Sense?

Once you know how much mortgage refinancing will cost you and have negotiated that amount down as much as your lender is willing to go you’re ready to calculate how long it’s going to take to recoup your out-of-pocket expenses. Simply divide your total closing costs by the amount you’re saving each month and you’ll have the number of months it’s going to take you to break even recouping your closing costs. If this timeframe for recovery is acceptable to you then it probably makes sense in your situation. When making this decision bear in mind that the average homeowner refinances every 4-5 years.

Click Here For More Details…

You can learn more about refinancing a mortgage without paying unnecessary lender fees and markup by checking out my free Underground Mortgage Videos.

httpv://www.youtube.com/watch?v=be9md0A0_2c
  • Free Underground Mortgage Videos

Here’s a quick sample to help you avoid those lender junk fees boosting their profits at your expense…

Who Are The Best Refinance Companies For Your Next Mortgage?

Are you shopping for the best refinance companies for your next home loan and want to avoid unnecessary fees? Choosing a big company like Amerisave doesn’t guarantee you’ll get the lowest refinance mortgage rates; in fact, there are a number of common mortgage mistakes that can cost you thousands, even with the best refinance companies. Here are several tips before you refi to help you find the best refinance companies without overpaying the lender or your mortgage broker at closing.

Shopping For The Best Refinance Companies

Most people approach shopping for the best refinance companies by collecting Good Faith Estimates (GFE) from lenders online or out of the phone book. The problem with this approach is that you can’t get an apples-to-apples comparison from different lenders using the Good Faith Estimate due to a lack of standards in our disclosure laws. The GFE is little more than a marketing tool used by lenders to promote overpriced home loans. If you make your choice from the best refinance companies based on the GFE you’re almost guaranteed to overpay.

Enlisting the Help of a Mortgage Broker

Instead of shopping for the best refinance companies like your neighbors did a more sensible approach to mortgage refinancing is to find the right person to arrange your next home loan. Brokers have access to today’s lowest refinance mortgage rates and a good one can cut through all the crap lenders are pulling to boost their profits in today’s economy. Sure you’re going to pay a loan origination fee for the broker’s services; however, finding the right person can save you thousands of dollars in unnecessary fees and markup over the lifetime of your home loan. Brokers are especially helpful if you have credit challenges and need help choosing the right program to get you qualified for mortgage refinancing.

Do Your Homework Before Applying

It’s a good idea to learn how mortgage refinancing works and what fees you can reasonable expect to pay; however, the most common mortgage mistake is overlooking your credit before applying with the best refinance companies. The refinance mortgage rates that you qualify for will most likely come in higher than what lenders are advertising because your quotes depend on your credit score and loan-to-value ratio (LTV). Unless you have the cash on hand for cash-in refinancing there isn’t much you can do to improve your LTV; however, improving your credit score and therefore mortgage rate is something even the most financially clumsy homeowner can do.

How to Improve Your Credit Score Before Mortgage Refinancing

Here’s an illustration to show you how your credit score affects the refinance mortgage rates you’ll get and the amount you’ll pay for your home over time:

credit mortgage rate Who Are The Best Refinance Companies For Your Next Mortgage?

As you can clearly see the lower your credit score, the higher your mortgage payments and finance charges are going to be over time. Many homeowners are intimidated by their credit reports and scores; however, they’re really not as scary as you might think.

Before you can think about applying with the best refinance companies it’s a good idea to check your credit reports for mistakes. If you have mistakes in your credit reports your credit score will be lower than it should be. (through no fault of your own)

The website AnnualCreditReport.com enables you access to all three credit reports for free without buying anything once per year. (The credit bureaus aren’t just being nice, they’re required by law)

If you find that you have inaccurate information in your credit reports you’ll need to file disputes with each credit bureau and allow enough time for the correction to be made and be reflected in your credit score before shopping for the best refinance companies. Once your certain that the information in your credit reports is correct you can improve your FICO score by paying down the balances on your credit cards as much as possible and avoiding taking out new accounts for at least 90 days before applying for a new home loan.

Click Here For More Details…

You can learn more about finding the best refinance companies for your next home loan with my free Underground Mortgage Videos.

httpv://www.youtube.com/watch?v=be9md0A0_2c
  • Free Underground Mortgage Videos

Here’s a quick sample to get you started finding the best refinance companies for your next mortgage loan without overpaying…

How to Get Better Refinance Mortgage Rates Than Your Neighbors

If you’re shopping for refinance mortgage rates you might be disappointed to find that the quotes you’re getting are coming in higher than what lenders are advertising. There are two reasons this could be happening: your credit score and deceptive lender marketing. Here are several no BS tips to help you get the best refinance mortgage rates and pay less than your neighbors closing on your next home loan.

Refinance Mortgage Rates Online

Shopping for mortgage refinance rates on the internet is a convenient way of collecting quotes; however, relying on the Good Faith Estimates you find online is a sure way to overpay. Recently lenders have been advertising 30-year fixed refinance mortgage rates less than four percent. Interest rates are at historically low levels but they’re not that low. Lenders routinely quote refinance mortgage rates that include discount points in the fine print. You’re paying through the nose at closing to buy your interest rate that low.

Discount Points Definition

If you’re new to all this mortgage gobbly-gook you might be unfamiliar with the term discount points. A discount point is defined as an amount you pay at closing to buy down your refinance mortgage rates. One discount point is one percent of your home loan amount and typically lowers your refinance mortgage rate by .25 percent. Does it make sense to pay discount points when interest rates are at their lowest levels ever? Absolutely not…it’s just a way for lenders to boost their profits at your expense.

Deceptive Mortgage Advertising

Aside from artificially lowering refinance mortgage rates by charging discount points the problem with the interest rates you see advertised is that they assume you have a credit score of 720 or better and a favorable loan-to-value ratio. If you have less equity in your home than 80 percent or have a credit score below 720 your refinance mortgage rates are going to be quoted higher.

There are steps you can take to ensure your credit isn’t hurting you when shopping for a new home loan. First, check your credit reports at annualcreditreport.com and make sure there are no mistakes dragging down your FICO score. Second, avoid opening new accounts for at least 90 days prior to refinancing and pay down the balances on your credit cards as much as possible. Maxing out your credit cards can lower your credit score by as much as 30 points, resulting in higher mortgage refinance rates.

Beware Lender Junk Fees

One of the most common mortgage mistakes your neighbors make is focusing only on getting the lowest refinance rates at the expense of fees. The reason fees are so important when mortgage refinancing is that you’ll have to recover your out-of-pocket expenses before benefiting from lower refinance mortgage rates. The more you pay at closing, including lender junk fees, the longer it’s going to take to break even. Lender junk fees can make it very difficult, even impossible to recover your out-of-pocket closing costs negating any benefit you’re getting from your new home loan.

Click Here For More Details…

You can learn more about getting today’s lowest refinance mortgage rates without paying unnecessary fees by checking out my free Underground Mortgage Videos.

httpv://www.youtube.com/watch?v=be9md0A0_2c
  • Free Underground Mortgage Videos

Here’s a quick sample to get you started finding today’s lowest refinance mortgage rates without overpaying one red cent.

Refinance Mortgage Rates – Banks vs Brokers

Are you looking for the best refinance mortgage rates for your next home loan but aren’t sure if going through a bank or a broker is the best option? Did you know that both banks and brokers profit from hidden markup of your mortgage rate, but only one is required to disclose the markup? Choosing the wrong person to arrange your home loan can be an expensive mistake you don’t want to be paying for the next 30 years. Here are several of my best tips before you refi to help you get the lowest refinance mortgage rates for your next home loan without paying junk fees.

Get the Lowest Refinance Mortgage Rates

Mortgage refinancing is a huge industry and practically everyone in the business is trying to make a buck at your expense. Banks and Brokers are no exception to this; in fact, according to the Secretary of Housing and Urban development the hidden markup I’m discussing here will be responsible for your friends and neighbors in the United States overpaying sixteen billion dollars this year alone.

What is this hidden markup that’s a part of even the best refinance mortgage rates? I am of course talking about Yield Spread Premium (YSP). Yield Spread Premium is actually a fee paid to the broker arranging your home loan for locking and closing with higher than necessary refinance mortgage rates. Think of YSP as an incentive, a kickback really, paid by your lender to the broker for overcharging you.

Brokers Do It, Banks Do It Too

Yield Spread Premium is an incentive for brokers to mark up your mortgage rates paid by the lender. YSP doesn’t apply to banks because they are the lender backing the loan. In the bank’s case the premium they make by giving you higher than market refinance mortgage rates is called Service Release Premium. The bank knows they make the majority of their profits by selling home loans to investors on the secondary market and home loans with higher than market rates bring them a premium profit. This profit realized by the bank from overcharging you is the Service Release Premium, which accomplishes the same thing as Yield Spread Premium…less cash in your pocket. The kicker is thanks to a loophole in the Real Estate Settlement Procedures Act your bank isn’t required to disclose any of this hidden markup of your interest rate.

How to Get Wholesale Refinance Mortgage Rates

The good news is that getting wholesale refinance mortgage rates is as simple as finding the right person to arrange your next home loan. It’s not as hard as you think; you don’t have to be a personal finance guru or have a cousin in the business to get wholesale mortgage rates. You simply have to find a mortgage broker willing to work for a flat origination fee of one percent without taking Yield Spread Premium on your home loan.

You can learn more about finding the right person to give you wholesale refinance mortgage rates without paying junk fees by checking out my free Underground Mortgage Refinancing Videos.

httpv://www.youtube.com/watch?v=be9md0A0_2c

Here’s a quick sample today to get you started finding the right broker for the job.