Best Refinance Companies

mortgage refi rates Best Refinance CompaniesAre you looking for the best refinance companies for your next home loan? Did you know that nearly all of them include hidden markup in your mortgage rate intended to boost their profits at your expense? In fact, this hidden markup is so bad that the Secretary of Housing and Urban Development said your neighbors in the United States would lose sixteen billion dollars this year alone because of it. Here are several tips to help you avoid hidden markup and junk fees that the so-called best refinance companies try to slip past you.

Who Are The Best Refinance Companies Online?

The internet is an excellent tool for digging up dirt on even the best refinance companies. The problem with using the internet is the overwhelming amount of bad mortgage advice available. (Much of which is spread by mortgage companies) Take for example the two percent rule of mortgage refinancing. This particular nugget of bad mortgage advice states that you should not refinance your home unless your new mortgage rate is at least two percent lower than your existing interest rate. If this were good advice most people would never refinance; however, even refinancing a half point lower can save you as much as a hundred dollars a month, and in this economy a hundred bucks can be a windfall you don’t want to pass up.

Why can’t you trust these best refinance companies with your next home loan? The problem with nearly every one of the so-called “best refinance companies” is that they charge you a mortgage origination fee for the work they do refinancing your home AND mark up your mortgage rate for compensation from the lender. This lender paid compensation is explained away when questioned by telling you “that fee isn’t coming out of your pocket, you don’t have to worry about it.” What these best refinance companies fail to tell you is that this hidden markup of your mortgage rate for the lender fee known as Yield Spread Premium drives your monthly payment up unnecessarily, and that money does come out of your pocket.

Yield Spread Premium Definition

Don’t worry if you’ve never heard of Yield Spread Premium because it’s not something your best refinance companies are going to want to discuss with you. Simply put, Yield Spread Premium is a fee paid to the person arranging your home loan for locking and closing with a higher than necessary mortgage rate. Both the lender and your broker know the mortgage rate you’ve qualified for when refinancing; however, the loan originator (mortgage broker or company) marks this rate up to collect Yield Spread Premium from your lender.

You might thing you can avoid all of this hidden markup nonsense when refinancing by taking out a home loan from your bank; however, just like the best refinance companies your bank marks up mortgage rates for a profit known as Service Release Premium. Just like the Yield Spread Premium charged by your best refinance company, the bank boosts profits with Service Release Premium when your home loan is sold to investors on the secondary market. Bottom line: You can’t avoid hidden markup refinancing your home loan with a bank or one of these so-called best mortgage companies.

You Can Refinance With Wholesale Rates

If shopping for a new home loan from the best refinance companies is a bad idea how can you find the lowest mortgage rates without hidden markup or junk fees? Despite what many mortgage brokers will tell you it is possible to refinance your home with wholesale mortgage rates paying a flat origination fee of one percent. This wholesale mortgage rate ensures there is no Yield Spread Premium on your home loan and that you’re not paying unnecessary discount points or junk fees.

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Check out my free Underground Mortgage Refinancing Videos and you’ll discover how easy it is to save thousands of dollars getting the best refinance rates without paying unnecessary markup or lender junk fees.

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Here’s a sample to get you quickly on the path to mortgage bliss.

Home Loan Refinancing Secrets

If you’re considering home loan refinancing there are several things you’ll want to know to avoid overpaying for your mortgage loan. Did you know that all of the mortgage rate quotes you get online or from your local bank or broker include hidden markup? This is the reason almost all of your neighbors are throwing away thousands of dollars every year for no good reason. Here are several of my best home loan refinancing tips that blow the doors off your lender’s dirty little secret.

Home Loan Refinancing Pitfalls

Most financial gurus categorize home loans as retail products and this is somewhat true; however, you don’t have to accept retail markup of your home loan. With the exception of banks (we’ll talk about the problems with bank originated home loan refinancing in a moment) home loans come from wholesale lenders and are arranged by brokers and mortgage companies that act as retailers. At least this is what they’d like you to believe. The truth is you’re already paying that mortgage company or broker a perfectly reasonable origination fee for arranging your home loan and any markup of your interest rate when home loan refinancing to collect a commission from the lender is not only unnecessary but drives up your monthly payment by as much as $1200 a year.

How does this unnecessary markup of your interest rate work? Loan originators like your mortgage broker collect a fee known as Yield Spread Premium from wholesale lenders for locking and closing your home loan refinancing with a higher than necessary interest rate. This is the mortgage industry’s dirty little secret. Brokers and other loan originators have an incentive for overcharging you and this kickback can be quite expensive. Question your broker about Yield Spread Premium and you’ll find them on the defensive, telling you not to worry about a fee that isn’t coming out of your pocket. What your broker isn’t telling you is why the lender pays them Yield Spread Premium and what it does to your monthly payments.

The Problem That is Yield Spread Premium

The Problem with Yield Spread Premium is what this markup does to your mortgage payment. Here’s an example to illustrate my point. Suppose your home loan refinancing is for $325,000 and the broker quotes you a mortgage rate of 6.0%. You agree to pay a 1.5% loan origination fee which means you’ll pay the broker $4,875 at closing for their work. First of all, don’t get me wrong, the broker deserves to get paid for their work; however, one percent is more than reasonable in this case. In this example the origination fee should not be more than $3,250. Where this example of home loan refinancing gets ugly is what your broker isn’t telling you about the mortgage rate. Your lender actually approved you for a 5.25% interest rate; however, the broker marked it up to six percent to collect a three percent commission from the lender.

That’s right, for every .25% that your mortgage broker overcharges you the lender pays them a kickback of one percent of your home loan refinancing amount. This is the industry’s dirty little secret and what the mortgage fat cats you see tooling around in their company hummers don’t want you to know about. Sure mortgage brokers are required to disclose the fee they receive on your HUD-1 due to the 2010 changes to the Real Estate Settlement Procedures Act; however, they all have clever ways of explaining this fee way.

What about banks you ask? Can’t you avoid all this home loan refinancing nonsense by getting a new mortgage from your bank? While it’s true there is no Yield Spread Premium involved with bank originated home loan refinancing for the simple reason that the bank funds your loan, banks still markup interest rates to boost their profits in a similar manner. Throw in the fact that your bank is exempt from the Real Estate Settlement Procedures Act and not required to tell you about their markup or profit margin on your loan and this more than ample reason to avoid the bank completely when it comes to home loan refinancing.

There is good news since you’ve found this website today. It is possible to pay a flat one percent origination fee for home loan refinancing and walk away from closing with a wholesale mortgage rate. My free Underground Mortgage Videos will show you how to get a wholesale mortgage rate while avoiding all the junk fees your neighbors overlooked with their home loans. Did I mention the videos are free, no strings attached?

You can learn more about wholesale home loan refinancing by checking out my free underground mortgage refinancing videos.

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The mortgage videos are quick and easy to follow…here’s a sample to help you get started trimming as much as $1200 worth of fat from your next home loan.

Mortgage Refinancing Closing Costs

Are you in the process of refinancing your home loan and don’t want to pay too much at closing?

There is mortgage rate markup and a number of junk fees lurking in your Good Faith Estimate and Settlement Statement that you need to avoid if you don’t want to pay too much.

Here are several tips to help you avoid overpaying at your mortgage refinancing closing.

Mortgage Refinancing Closing Pitfalls

Refinancing can be a frustrating process. You’re presented with a Good Faith Estimate by your cantankerous mortgage broker, someone who you’re not sure you can trust and a variety of cryptic fees that your broker assures you are “normal.” The fact of the matter is that if you accept your mortgage broker’s word on these fees you will surely overpay for your next home loan. What can you do to ensure you don’t pay too much at closing when mortgage refinancing? Read on… the mortgage tips found on this site save the average homeowner $1,000 per year in junk fees and mortgage markup.

Avoid Refinancing Pitfalls Including Junk Fees

Most of the junk fees you’ll encounter at mortgage refinancing closing are a result of your mortgage broker padding their commission at your expense. Simply put there are a handful of fees you’re likely to encounter that serve no purpose whatsoever and go straight into your mortgage broker’s pocket. What fees should you keep an eye peeled for? Mortgage rate lock fees, mortgage broker courier fees, and loan processing fees are pure garbage and not necessary for your loan. Additionally, if your mortgage broker is charging you a fee to lock in your mortgage rate this is a sure sign that you’re dealing with a dishonest broker. There isn’t a single mortgage lender out there that charges a fee for locking in your mortgage rate.

Your Mortgage Broker’s Commission

What about your mortgage broker’s commission? Surely your broker deserves to be paid for their work? No one’s saying that your mortgage broker doesn’t deserve to be paid; however, many brokers are too liberal when helping themselves to your money. Your mortgage broker’s fee for arranging your loan is the loan origination fee that you find on your Good Faith Estimate and Settlement Statement. This fee is more than ample compensation for your mortgage broker’s work and a reasonable amount to pay for loan origination is one percent of your home loan amount. Many brokers try and charge more than one percent; it’s not common to find estimates as high as two or three percent. Never agree to pay this much for loan origination… there are plenty of honest mortgage brokers out there willing to work for one percent.

There are also a handful of mortgage brokers out there that do not charge loan origination fees and are happy to brag about it. If the broker isn’t charging origination fees on your loan how are they paid? Ask the mortgage broker and they will spin you a tale that the lender is paying the fee which is saving you thousands of dollars on the refi. While it is true that the lender is paying the mortgage broker a fee they’re not paying this fee to do you a favor. Mortgage lenders reward brokers that lock and close mortgage loans with higher than necessary mortgage rates. In exchange for duping you with too high a mortgage rate the lender pays your mortgage broker’s commission. You get stuck with a higher than necessary mortgage rate and payment because the lender is paying your origination fee. Is it worth it to save one percent up front to pay this amount each and every year you keep the mortgage loan? This commission based markup of your mortgage rate raises the payment of an average home loan by $100 or more per month. Can you afford to throw away $1200 per year, every year for your mortgage broker’s commission?

You Can Pay Less For Your Mortgage Loan

You don’t have to be a financial guru to get the deal that I’m describing here when refinancing your home loan. Do your homework by investing one hour of your time to watch the mortgage videos on this site and you’ll have all the tools and knowledge you need to find the right person to arrange your next home loan. Notice that I said find the right mortgage broker rather than find the right mortgage loan. A common mistake many homeowners make is to shop for a mortgage loan in the same manner as a household appliance. This approach results in paying the hidden mortgage broker commission every time. Did you know that according to the Secretary of Housing and Urban development the hidden broker fee we’ve discussed is responsible for homeowners in the United States overpaying sixteen billion dollars per year? Don’t be a part of this statistic; find the right broker and you’ll save thousands of dollars per year on your next home loan.

How to Find the Right Mortgage Broker When Refinancing

Find the right mortgage broker to arrange your home loan and you won’t have to worry about mortgage refinancing closing costs. Who is the right mortgage broker for the job? Look for small time, self-employed mortgage brokers that do not employ a sales staff or work out of expensive office spaces. Mortgage brokers with expensive overhead will be unwilling to negotiate the deal you are looking for. Self-employed mortgage brokers do not have this overhead and will typically work for a one percent origination fee. Explain to the mortgage brokers you contact that you are willing to pay a one percent mortgage origination fee but will not accept any loan that includes markup of the interest rate for a commission. This fee for marking up your mortgage rate is called Yield Spread Premium. If you are upfront with the mortgage brokers you contact you will have no trouble finding one that will agree to your terms.

Y ou can learn more about mortgage refinancing closing costs and avoiding junk fees like Yield Spread Premium by registering for my Underground Mortgage Videos. Here’s a sample of what you’ll learn when you register.

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Register today and you’ll get instant online access to everything you need to ensure you pay thousands less for your next home loan.