Home Mortgage Refinancing Rates

Are you searching the Internet for Home Mortgage Refinancing Rates?

Mortgage rates are at their lowest levels in history so it’s very easy to find a good rate; however, if you want the lowest mortgage rates possible without overpaying the broker for a loan that doesn’t include junk fees there are a few things you’ll need to know.

Here are several tips to help you avoid overpaying for your next home loan while getting super low home mortgage refinancing rates.

Home Mortgage Refinancing Rates Online

The Internet is an excellent tool for researching mortgage rates; however, there are several precautions you need to take. If you’re looking at one of the big mortgage sites like Lending Tree, always check out their disclosure statement to see how they get paid for their services. Here’s a sample from Lending Tree’s disclosure statement…

Lending Tree does not charge you (the homeowner) any fee for its services. Computerized loan origination fees paid by the Lender may be included in your mortgage rate, points or loan term and will be shown on your settlement statement. (Meaning you’re paying the fee indirectly…still sounds like you’re paying Lending Tree a fee to me, what do you think?)

What’s a computerized loan origination fee anyway? Many of the websites you find on the Internet like Lending Tree do nothing but collect information and sell it to mortgage companies and brokers for a fee. The broker or lender turns around and passes the fee on to you in the form of a Computerized Loan Origination Fee which will appear on your Good Faith Estimate and HUD-1 Settlement Statement. Do you need to pay this fee to the Lending Trees of the world for selling your information? Absolutely not…

What about your mortgage rate? According to Lending Tree, the fee that they receive can also be included in your mortgage rate. The markup of your mortgage rate for a fee is known as Yield Spread Premium and you should know that the Secretary of Housing and Urban Development recently said this markup will cost American homeowners sixteen billion dollars this year alone…

Lending Tree’s claims of not charging a fee for their services simply aren’t true. The fee still comes out of your pocket; it’s just not paid to lending tree directly… When you pay this the form of a higher mortgage rate it’s the fee that keeps costing you all year long.

Lending Tree isn’t the only one out there that marks up your mortgage rate for fun and profit; in fact, most mortgage brokers routinely include Yield Spread Premium in their loans without fully explaining what they’re doing. Many mortgage brokers will tell you not to worry about this fee because it’s not coming out of your pocket; however, it’s not the fact that your lender is paying the broker a fee, but why they’re paying this fee that should concern you.

Yield Spread Premium: What You Need to Know

In the simplest definition Yield Spread Premium is a percentage of your loan amount (cash) created for the mortgage broker when they lock and close your home loan with an above market mortgage rate. This markup of your mortgage rate leads to a higher monthly payment and more cash out of your pocket. In fact, the mortgage broker is paid one percent of your loan amount for every .25 percent they markup your rate. The markup of .25 percent doesn’t sound like much but it can add a hundred dollars or more to your payment, adding up to thousand dollars or more per year.

There is good news since you’re reading this today… Yield Spread Premium can be avoided. It is possible to find a mortgage broker willing to arrange your home loan for a one percent origination fee without marking up your mortgage rate for a commission. You just need to know how to negotiate the deal. My Underground Mortgage Videos show you how to do just this while avoiding lender junk fees. You’ll also learn what you can do to give your credit a tune-up prior to applying.

Bank Mortgage Loans & Service Release Premium

Some homeowners think they can avoid mortgage broker’s fees and markup by refinancing their mortgage loan with a bank or credit union. The bad news is the bank charges the same markup on your mortgage rate as the broker; it just has a different name. Banks markup their mortgage rates to make a profit when your loan is sold to investors on the secondary market… loans with higher than market rates bring the bank premium profits.

When the bank marks up your mortgage rate to make this profit the markup is called Service Release Premium. The bank is not required to disclose this markup to you because they are exempt from the Real Estate Settlement Procedures Act which requires mortgage brokers to disclose the Yield Spread Premium the receive from the lender. Because banks don’t have to disclose their markup or profit margin on your mortgage you’ll never get as good a deal from your bank as you could refinancing your mortgage with an honest mortgage broker.

You can learn more about getting the best possible Home Mortgage Refinancing Rates without lender junk fees by registering for my Underground Mortgage Videos. Register today and you’ll have immediate access to the mortgage videos and a list of mortgage brokers in your area that do not mark up rates for a commission in my password protected member’s area, without downloading anything to your PC or Macintosh.

Best Mortgage Rate 2009

If you’re considering refinancing your home mortgage loan and are looking for the best mortgage rate in 2009, there are several things you need to know in order to avoid overpaying for the new loan.

Most homeowners have heard of mortgage junk fees but very few are familiar with the evils of Yield Spread Premium or how it raises your monthly payment unnecessarily. Here are several tips to help you get the best mortgage rate in 2009 when mortgage refinancing.

What is Yield Spread Premium?

Mortgage brokers receive compensation for their work in two ways. Your broker will typically charge you an origination fee for their part in arranging your loan which will be disclosed on your Good Faith Estimate. This fee could be as much as five percent but typically runs anywhere from 2-3%. One percent is actually a reasonable fee to pay your mortgage broker for loan origination.

The second way mortgage brokers receive compensation is from Yield Spread Premium on your loan. Yield Spread Premium is a percentage of your loan amount paid by the lender when the mortgage broker locks and closes your home loan with a higher than necessary mortgage rate. I say “higher than necessary” because the mortgage broker is already being compensated for their work with the origination fee you’re paying. Any amount of Yield Spread Premium on your loan could effectively double or triple the broker’s compensation on your loan.

Best Mortgage Rate 2009

In order to get the best mortgage rate when refinancing your mortgage you’ll need to avoid Yield Spread Premium completely. This unnecessary markup of your mortgage rate can add hundreds of dollars to your monthly payment, and for what reason? Just to give your mortgage broker a bonus to make their boat payment? Not on my watch…the free videos on this website will show you not only how to avoid Yield Spread Premium and lender junk fees responsible for homeowners in the United States overpaying nearly sixteen billion dollars every year according to the government.

Check out my Underground Mortgage Videos today and you’ll get immediate online access to the mortgage tutorial in my password protected memberhip area and a list of mortgage brokers in your area that do not pad their loans with Yield Spread Premium.

Par Mortgage Rates Definition

mortgage bubble Par Mortgage Rates DefinitionIf you are considering refinancing your existing home mortgage loan a par mortgage rate could save you thousands of dollars every year that you have the mortgage. The problem is that all of the mortgage rate quotes you see online and from your local mortgage companies include some markup to create a commission for the loan originator.

Here are the basics you need to know about par mortgage rates to help you get the lowest rate and monthly payment when refinancing your mortgage loan.

A “Par” mortgage rate is one that does not cost money to get or creates cash for the mortgage broker as a commission.

Mortgage rate sheets used by your Mortgage Company or broker are listed on a scale. Going from one side of the rate sheet to the other, the lower the mortgage rate the more you’ll need to pay in “discount points” to get that lower rate. As you move further along the scale there is a point where no points are required. This point on the rate sheet is a “par mortgage rate.” Move further along the rate sheet and you’ll see that mortgage rates higher than “par” creates cash commission in the form of Yield Spread Premium.

Here’s an example to illustrate how mortgage rate sheets quote an interest rate:

5.75% (.5 point required) 5.875% (.25 point required)
6.0% (zero points) Par Mortgage Rate
6.125% (.25% commission created) 6.25% (.5% commission created)

As you can see, 6% is the par mortgage rate of the day. Mortgage rates above 6% create cash for the Mortgage Company or broker while rates below 6% cost you money in the form of discount points. If you want the lowest possible mortgage rate when refinancing you’ll need to get as close to par as possible without creating Yield Spread Premium for the mortgage broker.

How do you get a par mortgage rate? You can get a par mortgage rate by paying a flat 1% origination fee to the person arranging your mortgage loan. Doing this is easier than you think; you just need to find the right mortgage broker for the job.

The free mortgage refinancing videos on this website show you how to get a par mortgage rate while avoiding lender junk fees in the process. Register today and you’ll be on your way to saving thousands of dollars every year on your next mortgage loan.

How to Shop for a Mortgage Broker When Refinancing

home loan How to Shop for a Mortgage Broker When RefinancingMost homeowners know very little about how mortgage brokers are compensated for their work.

They assume that the origination fee listed on their Good Faith Estimate is the broker’s commission for the home loan; however, what you don’t know about mortgage broker fees could cost you a lot of money.

Here are several tips and questions to ask potential brokers to help you find the right professional to refinance your home loan.

The mortgage industry in the United States has a dirty little secret known as Yield Spread Premium. Mortgage brokers are very good at explaining away this fee as “lender paid” compensation; in other words it’s not coming out of your pocket so don’t worry about it. The problem with Yield Spread Premium, which is a percentage of your loan amount created when the broker locks and closes your home loan with an above market interest rate, is that it really is costing you money…thousands of dollars in unnecessary finance charges every year that you’ll pay as long as you keep that loan

Yield Spread Premium is a Lie

Your mortgage broker pockets a commission from the lender for marking up your mortgage interest rate. Sure this is listed on the HUD-1 statement as a “broker rebate” but if your broker doesn’t tell you they’ve marked up your interest rate for cash it’s still a lie of omission. Your mortgage broker receives one percent of your loan amount for every quarter percent they overcharge you. This “rebate” is paid in addition to any origination fees or mortgage broker fees you’re already paying.

Mortgage Refinancing Done Right

Another problem faced by the majority of homeowners refinancing their mortgages is that they don’t know what a good deal looks like. The ideal transaction between a homeowner and a mortgage broker is a loan with zero Yield Spread Premium, no garbage fees, and a one percent origination fee. Think that this sounds too good to be true? It’s not if you know how to find the right mortgage broker to originate your loan.

Questions to Ask Your Mortgage Broker

Before you agree to anything with a mortgage broker there are several pointed questions you need to be asking:

  • 1. Are you the owner of your company? (it’s always easier to negotiate with a mortgage broker who is self employed and runs their own business)
  • 2. How long have you been originating mortgages? (ten years or longer)
  • 3. What is your closing percentage? (you want 90% or better)
  • 4. What is your percentage of compensation including Yield Spread Premium?
  • 5. Will you originate my loan yourself? (looking for a yes here)
  • 6. Will you accept a one percent origination fee without Yield Spread Premium? (this is a deal breaker, if the answer is no, move on to the next broker)
  • 7. Will you provide me the wholesale lender’s lock confirmation when I decide to lock my mortgage rate? (another deal breaker…needs to be yes)
  • Honest mortgage brokers willing to work for a one point origination fee do exist and finding a broker like this will save you thousands of dollars and countless headaches when refinancing your home. You can learn more about getting a wholesale mortgage rate while avoiding lender junk fees by registering for my free mortgage video tutorial.

    Refinancing Home Loan

    When the Federal Reserve lowers short term interest rates mortgage refinancing becomes a hot topic for many homeowners. If you are considering refinancing your mortgage but are concerned about paying too much there are several things you need to know about shopping for a new home loan. Here are several tips to help you refinance your home loan without paying garbage fees or unnecessary markup of your mortgage rate.

    Banks vs. Mortgage Brokers

    The first thing you need to know is that you should never take out a mortgage from a bank or broker bank. Banks are exempt from the Real Estate Settlement Procedures Act and are not required to disclose their profit margins or markup of your mortgage rate. If you refinance your home loan with a bank you’ll never get a wholesale mortgage rate or anything close to it. The same is true of broker banks.

    home mortgage loan Refinancing Home LoanWhat’s a broker bank? This is basically a mortgage company or broker operating as a bank. Many mortgage companies and brokers changed their businesses when the law changed in order to take advantage of the same loopholes as banks. The only way to recognize if your mortgage company or broker is acting as a broker bank is to ask if they close on the mortgage in the name of the company or the wholesale lender. If the answer you get is that they close in their own company’s name you are dealing broker bank and cannot refinance with wholesale rates.

    Mortgage Broker Secrets

    The biggest secret your mortgage broker is keeping from you is called Yield Spread Premium. This is the industry term for the commission your mortgage broker receives for marking up your mortgage interest rate. Brokers do this because lenders pay one percent of you loan amount for every .25 percent they overcharge you…something they do without telling you. There are ways to recognize this markup of your mortgage rate, and it is possible to avoid paying it when refinancing.

    How to Recognize Yield Spread Premium

    Your first opportunity to spot Yield Spread premium is on the Good Faith Estimate; however, many brokers intentionally omit it from this document. If you can get your hands on the rate lock confirmation from the lender, Yield Spread Premium is clearly disclosed; however, many brokers falsify rate lock confirmation to omit this markup. The last chance you’ll have to spot this markup is on the HUD-1 statement. If Yield Spread Premium is included with your loan it will be listed on lines 810 or 811 of this document. You may see it called a “broker rebate” or YSP paid to broker but this dollar amount is the kickback your broker receives for overcharging you.

    Yield Spread Premium Can Be Avoided

    Homeowners who learn to recognize Yield Spread Premium can negotiate with potential mortgage brokers to avoid paying it. You can learn more about refinancing your home loan without paying too much by registering for our free mortgage tutorial.