Mortgage Refinancing With Wholesale Rates Will Save You Thousands

Are you in the market for mortgage refinancing but aren’t sure how to get the best deal for your next home loan? Did you know that mortgage refinancing with a wholesale interest rate will cut as much as $1200 worth of hidden markup from your home loan every year? Despite what your mortgage broker tells you it is possible to pay a flat fee of one percent for loan origination and refinance your home with wholesale mortgage rates. Here are several of my best mortgage refinancing tips to help you slash that $1200 worth of fat from your next home loan.

Mortgage Refinancing to Lower Your Payments

According to the Secretary of Housing & Urban Development (HUD), homeowners in the United States (your friends and neighbors) will overpay sixteen billion dollars for their home loans this year because of hidden markup and junk fees. The fee you need to avoid when mortgage refinancing is called Yield Spread Premium. Don’t sweat it if you’ve never heard of Yield Spread Premium, your neighbors haven’t heard of it either which is why they’re overpaying for their home loans.

What is Mortgage Yield Spread Premium?

Simply put, Yield Spread Premium is a fee paid by mortgage lenders to any broker that locks and closes your home loan with a higher than necessary interest rate. The amount of the fee they receive depends on how much they markup up your interest rate. For every .25 percent that you unknowingly agree to overpay the broker receives one percent of your home loan as a kickback. Here’s an example to illustrate how Yield Spread Premium drives your monthly payments up unnecessarily and how much you can save by avoiding the hidden markup when mortgage refinancing.

Suppose for example you’re refinancing your home for $315,000 and your broker quotes you an interest rate of 6.5% charging you an origination fee of two percent. At closing you’ll be required to pay $6,300 for the broker’s part in arranging your mortgage refinancing. The first thing you need to know about the mortgage origination fee is that you never want to pay more than one percent of your home loan. In this example $3,150 is more than ample compensation for the broker’s work arranging your home loan. So what about the mortgage refinancing Yield Spread Premium in this example?

Yield Spread Premium in Action

What your broker isn’t telling you is that you actually qualified for a 6.0% mortgage rate and they’ve marked it up to 6.5% to collect an extra 2% from your lender. That’s another $6,300 on top of the $6,300 you’re already overpaying this person for their work. What does this hidden markup do to your mortgage payments? Suppose you’re mortgage refinancing with a 30-year, fixed-rate mortgage of $315,000. At 6.5% your monthly payment will be $1,991. If you had the interest rate you deserve when mortgage refinancing at 6.0%, your monthly payment would be only $1,888. That’s a difference of $103 per month, a whopping $1,236 per year of your money that you’re throwing away because of this hidden markup.

You Can Get Wholesale Mortgage Rates

You don’t have to be a personal finance guru or have connections to get a wholesale mortgage rate, you just need to find the right person to arrange your home loan when mortgage refinancing. Who is the right person to arrange your next home loan? You won’t find the right broker with those large, nationwide brokerage houses; they simply have too much overhead to give you the kind of deal I’m describing here. Look for a small, self-employed local mortgage broker in your area and they’ll be much more likely to negotiate the kind of mortgage refinancing deal that I’m describing here.

You can learn more about getting a wholesale interest rate 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 to get you started today by exposing the dirty secret your lender and broker would rather you didn’t know…

The Truth About Your Mortgage Origination Fee

Should you pay that mortgage origination fee when taking out a new home loan to purchase or refinance? Many homeowners opt for no closing cost home loans because they don’t have to fork over cash at closing; however, these loans can get quite expensive in the long-term if you don’t fully understand what you’re getting into. Here are several tips to help you avoid the expensive pitfalls that come with a no mortgage origination fee home loan.

Mortgage Origination Fee Definition

What is the mortgage origination fee? The person arranging your loan is known as the loan originator by the fat cats in the business, and the fee they receive for arranging your home loan is the mortgage origination fee. While there is no industry standard for this mortgage origination fee, it’s easy to find brokers and other companies charging as much as 2-3 percent; however, you should know that one percent is more than reasonable compensation for the broker’s work on your home loan.

So what about these no closing costs home loans? How is the person arranging your home loan paid? After all, as a homeowner I’m sure you’ve seen that there are no free lunches when it comes to anything related to your finances. The problem with no mortgage origination fee home loans is how much you’ll be paying out in the long run. The broker arranging your home loan is going to get paid no matter what, and if you’re not paying the closing costs that means the lender is footing the bill. What’s wrong with that you ask?

After all, if the fee’s not coming out of your pocket why should you care? The problem with no closing cost home loans isn’t that the fee is coming out of someone else’s pocket, it’s why they’re paying this fee for you. Always ask: “what’s in it for them,” right?

Mortgage Yield Spread Premium

There is a little known fee called Yield Spread Premium or YSP, which is the lender paid compensation for your broker. When you take out a home loan without paying the mortgage origination fee, you’re trading a higher mortgage rate in exchange for Yield Spread Premium paid to your broker. This usually works out to a payment of 1% for every .25% markup you accept in exchange for no closing costs. That’s no biggie; what could that tiny markup do to my monthly payment?

Here’s an example to illustrate the problem with no closing cost home loans. Suppose you are refinancing your home loan for $315,000 and opt for the no closing cost home loan. Your broker quotes you a mortgage rate of 6.5% and since there is no mortgage origination fee you’ll be saving $4,725 at closing assume the broker would have charged you 1.5%. Your payment on a 30 year fixed rate mortgage in this example will be $1,358 per month.

What you might not know is that had you paid that mortgage origination fee of $4,725 you would have walked away with an interest rate of 5.75%. The same 30 year, fixed rate home loan at 5.75% would have a monthly payment of $1,254. That’s a savings of $1,248 per year. The difference in your payments means by opting for the no closing cost home loan you’ll be paying that $4,725 over and over every four years for as long as you keep your home loan. Sill think that no mortgage origination fee home loan is a good deal?

You can learn more about purchasing or refinancing your home with a wholesale mortgage rate without paying hidden markup or junk fees by checking out my free Underground Mortgage Refinancing Videos.
httpv://www.youtube.com/watch?v=be9md0A0_2c
Here’s a quick video to get you started today by exposing the truth about your broker’s dirty little secret that’s costing your neighbors thousands of dollars.

Refinancing Banks

You might be considering refinancing your home mortgage loan with your bank or credit union to take advantage of today’s low interest rates. After all, what could be more convenient than simply transferring your mortgage payment out of your checking account?

Are bank originated mortgage loans really the best deal for your home mortgage? Here are several tips to help you avoid making an expensive mistake refinancing your home loan.

Refinancing Banks & Your Mortgage Loan

Banks and credit unions love to brag about their mortgage loans. Bank of America for example loves to flaunt its “no fee” mortgage loans… but are they really a good deal? I’d say be sure and read the fine print before taking out a loan from your bank or credit union; however, thanks to the banking lobby there is no fine print for you to read. What do mean by this? Allow me to explain…

The Real Estate Settlement Procedures Act

Also abbreviated RESPA, this is the legislation that required mortgage lenders to disclose their fees and markup. Note that I said “required” as the Banking Lobby spent millions of dollars lobbying congress to change this disclosure legislation to exclude banks…successfully. That’s right, your bank and credit union is exempt from RESPA laws that require fair and honest lending practices in the United States. Banks are simply not required to disclose their markup or profit margins on your mortgage loan.

Service Release Premium

Big deal you might be thinking, bank mortgage rates have to be good to compete with other lenders right? Nope…your bank doesn’t care about being competitive, and most homeowners don’t know the first thing about mortgage rates to understand how banks are making their money.

So how exactly do banks make money from mortgage loans? They just sit back and collect interest from my mortgage payments right? Wrong!

Banks make the majority of their profits selling loans to investors on the secondary mortgage market. The higher the interest rate on your loan the more profit the banks make when your loan is sold. This is why the bank will try and close your loan with the highest mortgage rate possible. Banks know what mortgage rate you could get in the open market from a mortgage broker; however, they mark this rate up create a profit when your loan is sold. This markup of your mortgage rate by the bank is known as Service Release Premium.

Does Service Release Premium Really Matter?

How much could your bank really markup up your mortgage rate and does it really make a difference? Well, suppose you refinance your home for $300,000 with a 30 year fixed rate loan at 5.5%. What you didn’t know is that you could have had a 5.0% mortgage rate from a wholesale lender. What does this markup by the refinancing bank mean for your mortgage payment?

At 5.5% on a $300,000 mortgage your monthly payment will be $1700 per month. If you had the mortgage rate you deserve at 5.0% your monthly payment would only be $1610 per month. That’s $1080 per year you’re flushing down the toilet just to boost your bank’s profits.

How to Get a Wholesale Mortgage Rate

You don’t have to be a financial guru to refinance your mortgage with a wholesale mortgage rate. First of all you should avoid refinancing banks and credit unions no matter how convincing the salesperson or your neighbor Bob. Secondly, you need to find the right person to arrange your new mortgage. This person needs to be a mortgage broker, but not just any broker. Mortgage brokers, like banks, mark up mortgage rates for a commission so you’ll need to find the right broker for the job.

It is possible to refinance your home loan with a wholesale mortgage rate and pay only a 1.0% origination fee to the mortgage broker for arranging the loan. You can learn how to do this for yourself while avoiding costly lender junk fees by checking out my free mortgage videos on this website.

Check out my Underground Mortgage Refinancing Videos today and you’ll get immediate access to videos that save the average homeowner $1,000 per year… Guaranteed!

Wishing you success with your next home mortgage,

Robert Regehr

Wholesale Mortgage Lenders

home equity Wholesale Mortgage LendersIf you’re considering refinancing your home mortgage loan in 2009 and are looking for a wholesale lender there are several things you need to know in order to take advantage of wholesale rates. As a member of the public you cannot simply contact a wholesale lender expecting to refinance your home mortgage with a wholesale mortgage rate.

Here are several tips to help you take advantage of wholesale mortgage rates when refinancing without hidden retail markup of your loan.

What Are Wholesale Mortgage Lenders?

Wholesale mortgage lenders offer loans exclusively through mortgage brokers. Period. You cannot get a wholesale mortgage loan from your bank or credit union no matter what the banker or your neighbor Bob tells you. The reason for this is due to a little know loophole in the Real Estate Settlement Procedures Act that allows banks to hide their markup and profit margin on your loan. Your banker will show you the Bank’s mortgage rate sheets and swear the rates have not been marked up; however, the Banks mortgage rate sheets already include the markup known as Service Release Premium to boost the banks profits when your loan is sold on the secondary market.

What Are Wholesale Mortgage Rates?

Wholesale mortgage rates, also known as par mortgage rates, are interest rates that do not include any Yield Spread Premium or discount points to get them. Yield Spread Premium is a percentage of your loan amount created when the Mortgage Company or broker locks and closes your loan with an above market mortgage rate. This is typically done to create a commission for the broker. Discount Points are a form of prepaid interest due at closing paid to the lender in exchange for a lower mortgage rate. Wholesale mortgage rates include neither Yield Spread Premium nor discount points.

Why Can’t You Just Call Up a Wholesale Lender?

You can certainly call up a wholesale mortgage lender, they all operate retail divisions; however, you will be offered a retail mortgage loan with the same markup as if you had gone through a typical mortgage broker. If banks and wholesale lenders are out of the question how does one go about refinancing with a wholesale mortgage rate? In order to take advantage of wholesale mortgage rates you’ll have to find a 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 is Easier Than You Think

First, you’ll need to do a little homework learning when and where you can recognize Yield Spread Premium in your loan documents. Second, you’ll need to know how to negotiate with mortgage brokers and where to look for a broker willing to work for a flat origination fee of one percent without marking up your mortgage rate. There are honest mortgage brokers out there willing to work for a flat origination fee of one percent without taking Yield Spread Premium on your loan…you just need to know where to look to find one.

You can learn more about refinancing your home loan with a wholesale mortgage lender by registering for the free mortgage videos on this website. When you register you’ll get a list of mortgage brokers in your area that do not work for Yield Spread Premium and learn how to recognize and avoid lender junk fees.

Fixed Rate versus Adjustable Rate Mortgage Loan When Refinancing

mortgage rates Fixed Rate versus Adjustable Rate Mortgage Loan When RefinancingMany homeowners favor fixed rate mortgage loans because they need a monthly payment that will not change over the life of their loan. While it’s true that Adjustable Rate Mortgages are typically lower there is the risk of payment shock. Here are several tips to help you choose the right mortgage while minimizing your risk.

How to Choose The Right Mortgage Loan

The decision when choosing the type of mortgage for your home can be easily made based on the amount of time you will be staying in your home. When the economy is bad choosing a Fixed Rate Mortgage is a safe bet that can hedge you from economic uncertainty.

Mortgage rates are nearly impossible to predict and no one can say with any degree of certainty what they will be in several years. If you only plan on keeping your home for five to seven years you could benefit from the lower rates offered by Adjustable Rate Mortgage loans.

Here are some of the benefits of fixed mortgage loans versus adjustable rate mortgage loans.

Fixed Rate Mortgage Loans:

• Predictable mortgage payments
• Fixed interest rates are still at historically low levels
• Won’t have to refinance when rates go up
• Fixed Mortgage Rates are nearly at the same levels as Adjustable Rate Loans

Adjustable Rate Mortgage Loans:

• Mortgage Rates are just lower than fixed rate loans
• Hybrid loans have fixed rate periods lasting as long as seven years
• Some loans offer ultra-low introductory rates
• Ideal for homeowners only planning to stay for a short while

There are other reasons for choosing one type of loan over another but the safest bet is to base your decision on the amount of time you will be keeping your home. If you are only going to be with your home for the short term, you cans save yourself some money by choosing an Adjustable Rate Mortgage loan.

You can learn more about your options when refinancing, including costly mistakes to avoid by registering for the free refinancing videos on this website.