Today’s Fixed Mortgage Rate

If you’re in the market to refinance your home with a fixed rate mortgage there are several things you’ll want to know to avoid overpaying. Most people focus on finding the lowest mortgage rates and often overlook junk fees and markup when refinancing. Here’s what you need to know about Today’s Fixed Mortgage Rate when refinancing your home to avoid paying too much.

Today’s Fixed Mortgage Rate

You might have come here using a search engine looking for today’s lowest fixed mortgage rates. While it’s easy to collect fixed mortgage rate quotes using the Internet, what you might not know is that ALL of the quotes you find online and out of the phone book have been marked up to create a commission for someone. No big deal…mortgage brokers gotta eat too right? Actually, that’s why you pay a loan origination fee. The person arranging your home loan should get paid for their work; however, you should draw the line when the mortgage broker takes a SECOND commission at your expense.

That’s right, many mortgage brokers structure their loans to double, often triple their commission at your expense by marking up your mortgage rate without telling you. Sure, if you’re dealing with a mortgage broker they have to disclose the fee they’re receiving for this markup but most have clever ways of disguising what they’ve done. Your mortgage broker might even tell you not to worry about this fee because the lender’s paying it and it’s not coming out of your pocket. Banks on the other hand are exempt from disclosure rules and don’t have to tell you how much money they’re making off your loan…reason enough to avoid banks altogether when refinancing your home.

How to Get the Best Fixed Mortgage Rates

In order to get the lowest fixed mortgage rates when refinancing your home you’ll need to know more about how loan originators are compensated. Your mortgage loan originator is simply the person arranging your home loan…it doesn’t matter if you are refinancing or if this is a new mortgage to purchase your home, they all generate the same fees and commissions. The first fee you need to be concerned with is the loan origination fee. Often called origination points, this is the fee paid to the mortgage company or broker arranging your loan and should not be more than one percent of your loan amount. The second way mortgage companies and brokers are compensated for their work is the fee called Yield Spread Premium.

What You Need to Know About Yield Spread Premium

Yield Spread Premium is simply a dollar amount created when the loan originator locks and closes your home loan with a higher than necessary mortgage rate. Your mortgage broker gets this commission of one point for every .25% they markup your interest rate. Whenever you hear someone talking about points remember that a “point” is one percent of your loan amount. You will rarely find Yield Spread Premium on a Good Faith Estimate because most mortgage companies and brokers lowball fees on the Good Faith Estimate to make their loan offers seem more attractive. This is why the Annual Percentage Rate or APR is worthless for mortgage comparison shopping…it’s based on lowball figures and is little more than marketing propaganda.

How to Shop for a Mortgage Loan

Shopping for a mortgage loan isn’t like shopping for a household appliance. If you collect mortgage quotes online and from local mortgage companies and pick the lowest rate you’ll wind up with the best of the worst loan offers. Instead of shopping for the best or lowest mortgage offer it makes more sense to find the right person, an honest mortgage broker willing to work for a one percent origination fee without marking up your interest rate to arrange your next home loan. How do you find this person? Start by telling the mortgage companies and brokers you contact that you understand Yield Spread Premium and will not accept any home loan that includes this markup. Once you find a mortgage broker willing to accept your terms you’ll still need to know how to use your loan documents to keep this person honest, but you’re on the right track.

You can learn more about getting today’s lowest fixed mortgage rate without paying unnecessary markup or junk fees by checking out my free Underground Mortgage Refinancing Videos.


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The Ugly Truth About Bank Mortgage Rates

If you’re in the market for a new mortgage loan or are thinking about refinancing your existing home loan, you might be considering taking out the mortgage loan from your bank. While it’s true that bank mortgages are a convenient way of taking out a home loan, if you want the best mortgage rates and lowest mortgage payment there is a very compelling reason for avoiding banks. Here are my best mortgage tips to help you avoid paying too much for your next home mortgage loan.

Best Mortgage Rates

Shopping for a mortgage loan is a confusing process for many homeowners. Most people just compare mortgage rates from their bank with a couple mortgage companies out of the phone book thinking that the biggest banks and lenders offer better deals. This might be true for products from the Wal-Marts of the world, when it comes to mortgage loans this mindset will cause you to overpay thousands of dollars.

Mortgage rates, especially those from your bank do not work like other retail purchases you make, buying a plasma television for example. You would think Bank of America, Wachovia Bank, and Wells Fargo Mortgage would offer discount mortgage rates because they are high volume lenders; however, this is simply not the case.

Home mortgage rates, it doesn’t matter if they’re from a wholesale lender or any bank, are not like other consumer products. There is no volume discount when it comes to home loans so it makes no difference if you take out a home loan from a mortgage giant like Wells Fargo Mortgage or the mom and pop mortgage company in a small town. This doesn’t mean that both types of lenders, large corporate giants and small time mortgage brokers alike, don’t have overhead costs that include marketing, office spaces, and the occasional company hummer. (Trust me on this point…you do not want to work with any mortgage company or broker you see tooling around in a hummer with their face and logo splattered all over it.)

Mortgage Rates Are Investment Driven

The mortgage markets do not behave like other retail markets when it comes to supply and demand. When demand is low mortgage rates typically go up…unlike supply and demand of physical products. This is because mortgage rates typically follow the yield, which is return on investment, in the bond markets. When the bond yields are low, which usually corresponds to bad economic news like the current recession, mortgage rates go down. When the bond yields are high mortgage rates go up because the demand of investors affects long term interest rates like what you pay on a 30 year fixed rate mortgage. It’s next to impossible to try and time the market when it comes to mortgage rates. Your energies are best spent shopping for the right person to arrange your next home loan rather than trying to predict when mortgage rates are going up or down.

What You Need to Know About Bank Mortgage Rates

Banks are not wholesale lenders nor do they offer their customers wholesale mortgage rates. Bank mortgage rates are set by the bank and if you’re willing to pay for a bank mortgage loan you’re welcome to take their rate or leave it…no negotiating. You would think that your bank has to be competitive with wholesale lenders in order to remain competitive in the marketplace; however, that’s not how banks operate when it comes to mortgage loans. Banks rely on the fact that most homeowners don’t understand how mortgage rates work to drive their profits, taking advantage of most people’s lack of knowledge. Most people fall victim to the notion that bigger is better when it comes to mortgage loans, a notion that results in overpaying thousands of dollars more often than not.

One of the biggest problems with bank originated mortgage loans is that your bank is exempt from the Real Estate Settlement Procedures Act and is not required to disclose any of their profit margin or markup on your loan. All the bank is required to disclose to you is an Annual Percentage Rate that they base on a Good Faith Estimate that has all of the fees low-balled to make the overpriced home loan seem more attractive.

Banks don’t offer wholesale mortgage rates to their customers because the bank makes most of their profit when your loan is sold to investors on the secondary market. Your bank may continue to service the loan after they sell it meaning you’ll never know the fast one your bank pulled on you. The profit your bank makes from selling your loan with a higher than market mortgage rate is called Service Release Premium. If you never shop from a wholesale mortgage source such as an honest mortgage broker you’ll never know how much the bank is overcharging for their mortgage loans.

If you want the lowest possible mortgage rate to purchase or refinance your existing home loan you’ll need to get a wholesale mortgage rate which is also known as a par mortgage rate. This means you can’t shop for the “best mortgage” lender or bank, you’ll have to shop for the right person to arrange your next home loan to get a wholesale mortgage rate.

You can learn more about finding the right person to arrange your next home loan so you can take advantage of wholesale mortgage rates while avoiding unnecessary mortgage junk fees by registering for my free underground mortgage refinancing videos.


Here’s a sample of what you’ll get when you sign up today.

Cash Out Mortgage Refinancing

Are you considering cashing out equity in your home when refinancing your mortgage?

Your home can be an excellent source of cash if you’re willing to give up some of your hard-earned equity in exchange for liquidity.

Cash out mortgage refinancing is one way to get your hands on cash for everything from consolidating bills, home improvement, even paying for college. Here are several tips to help you get the most for your hard-earned equity when cash out mortgage refinancing.

Cash Out Refinancing: What You Need to Know

Taking cash back when refinancing your mortgage is simply borrowing more than you owe on your existing home loan and pocketing the cash. Take the money and run right? If you’ve had your existing mortgage for a while the principle balance is probably much lower than it was when you purchased your home. Provided your home’s value hasn’t dropped significantly due to the faltering economy your build up of equity allows you to refinance and take cash back at closing.

Suppose for example you owe $110,000 on a $300,000 home and want to take back $25,000 in cash to build an addition to your home. You could refinance your existing home loan for $135,000 and walk away from closing with $25,000 cash in your pocket.

Since it’s your money you can use the cash for anything: home improvement, purchasing a second home, paying college tuition, consolidating higher interest debt like credit cards, anything really. Mortgage interest rates are at historically low levels right now and because of the market lenders are desperate to deal. Keep in mind that refinancing with cash back is different from taking out a Home Equity Line of Credit (HELOC). Home equity lines tend to be more expensive and often carry higher interest rates than if you had refinanced with cash back.

How Much Cash Can You Take Out Refinancing?

Usually, you’re allowed to refinance up to 80% of your home’s value. Some lenders may allow you to borrow more; however, you may be required to purchase Private Mortgage Insurance (PMI), or settle for a higher mortgage rate. You can avoid Private Mortgage Insurance by opting for a Home Equity Line of Credit; however, this is usually a more expensive option than cash out mortgage refinancing.

Refinancing your mortgage is generally a good idea when current mortgage rates are lower than your existing home loan. Cash back refinancing is one reason for taking a higher mortgage rate…if you need the cash you may be able to justify the higher monthly payment. Keep in mind that cash out mortgage refinancing is not without risks; you are giving up a portion of your equity and with declining property values there is a chance you could end up underwater in the new mortgage loan.

Cash Out Refinancing Pitfalls

There are a number of problems with cash out refinancing that can result in overpaying thousands of dollars every year that you’re in your mortgage loan. Because you’ll likely end up with a higher monthly payment than you’re used to when taking cash back you have to be careful to avoid anything that could potentially raise your payment on top of this. What raises your mortgage payment unnecessarily? Yield Spread Premium…the commission paid by the lender for locking and closing your loan with a higher than necessary mortgage rate.

Mortgage brokers earn their commission from two sources. They can charge you an origination fee for their part in arranging your home loan and they can take a commission from the lender in the form of Yield Spread Premium. It is possible to cash out refinance your home paying only a flat one percent origination fee without Yield Spread Premium if you follow the guidelines in my Underground Mortgage Videos; however, most homeowners pay much more than this.

How does the commission from Yield Spread Premium drive up your mortgage payment unnecessarily? First of all, for every .25 percent that the mortgage broker overcharges you the lender pays a commission of 1.0 percent. It’s not uncommon to find mortgages done with .75 percent or higher markup on the mortgage rate. In fact, you’re probably paying this much on your existing home loan now.

Here’s an example to illustrate why you need to avoid Yield Spread Premium when cash out mortgage refinancing. Suppose you owe $200,000 on your existing mortgage and your home is worth $350,000. You’ve decided to cash out refinance $50,000, making the balance of your new loan $250,000. Your mortgage broker tells you that you qualify for an interest rate of 6.5 percent and charges you an origination fee of 2.0 percent.

First of all, had you watched my Underground Mortgage Videos you could have paid a flat 1.0 percent origination fee and saved yourself $2,500 right off the bat…but what about that mortgage rate? What your broker isn’t telling you is that you actually qualified for 5.75 percent mortgage loan; however, they’ve marked your rate up to get a 3.0 percent commission from the lender. This three percent is in addition to the 2.0 percent origination fee that you’re already overpaying. In this transaction your mortgage broker walks away with $12,500 for their part in arranging your lemon of home loan…now let’s take a look at what you got stuck with shall we?

You already know that you paid $2,500 too much for the origination fee but what about that 3.0 percent Yield Spread Premium? At 6.5 percent your monthly payment on a thirty year fixed rate mortgage will be $1,580. If you had gotten the mortgage rate you deserve at 5.75 percent your payment would only be $1,450! In addition to the $2,500 you overpaid for loan origination you’re throwing away $1,560 every year that you keep this loan!

Can you now see how people get screwed over on their mortgage loans and why the Secretary of Housing and Urban Development said homeowners in the United States will overpay sixteen billion dollars for their home loans this year alone?

Now that you know how people get ripped off refinancing their mortgage loans what can you do to make sure you’re not a victim of this unnecessary mortgage rate markup? Register today for my Underground Mortgage Videos and you’ll discover how to get the best deal for your next mortgage loan without markup or junk fees.

Getting the Lowest Mortgage Rate Possible

home loan Getting the Lowest Mortgage Rate Possible
When it comes to getting your home loan, nearly everyone wants to get the lowest mortgage rate possible. The question is how to do this…the answer doesn’t have to be as confusing as it might seem.

The first step to getting the best mortgage rates possible is for you to understand how mortgage rates are determined and where you stand based on your credit history and credit score.

If you currently have a mortgage loan, have you been hearing rates other people qualified for or have looked in the newspaper and seen low rates that make yours look terrible? Are you wondering how some people can secure a lower rate? Perhaps you are looking to get a mortgage and you want to have the lowest rate possible but you don’t know how to do it.

Your first step is to learn all that you can about mortgage rates and how the rate is determined. One of the most important factors in your mortgage rate is your credit rating. Most loan companies and banks will use your FICO score (FICO is short for the Fair Isaac Corporation) to determine what rates you will be charged and if you will even be approved for the loan.

However, this doesn’t mean that you have to have perfect credit to get a good mortgage rate. The truth of the matter is the better your FICO score, the better your chance of a good mortgage rate but there are other ways you can try to lower your rates even if you have less than perfect credit.

First, it is essential you pay any and all of your existing bills on time and as soon as possible. Avoiding delayed payments will help add points to your credit score. It can also be helpful to pay more than the minimum amount on long term balances. Paying over the amount due shows that you want to pay off your debts and also helps improve your score over time. You should also avoid applying for new credit which can lower your score with each new credit check. These simple strategies combined can help you get the lowest mortgage rates possible for you.

The Fed Rate Cut And Refinancing Your Mortgage

The Federal Reserve Cut Interest Rates Again Today For The Second Time In Eight Days…Should You Refinance Your Mortgage Now?

With all the talk of interest rate cuts refinancing has become a hot topic for many homeowners. Here are the answers to several common questions regarding the current rate cuts and deciding if taking out a new mortgage is right for your situation.

When Does It Make Sense to Refinance a Mortgage?

Question: Is it true that you should not refinance unless your new mortgage rate is two percent lower than your existing rate?

Question: When should I apply to refinance my mortgage? Do the fees and hassles of refinancing outweigh the financial benefits?

Question: I am thinking about selling my house but could really use the lower rate now. If I refinance now and then decide to sell my home will I be hurting my chances of qualifying for another loan?


Forget those rules that say you should never refinance unless your new mortgage rate is “this” much lower than your old rate; it’s best to decide if mortgage refinancing makes sense for you by evaluating the loan on a cost vs. savings basis. You can do this by calculating your break even point by dividing all of your fees and closing costs by the monthly savings from your new loan. Suppose for example that your new home loan has a payment $200 less than your old mortgage. If it cost you $3,500 to take out the new loan divide $3,500 by $200 and you’ll see that your break even point comes after 18 months. This is when you being to realize a savings from the new, lower mortgage payment.

home mortgage points The Fed Rate Cut And Refinancing Your MortgageIf you plan on keeping your home long enough to reach this break even point and realize a savings, refinancing probably makes sense in your situation and will save you money. If you plan on selling before your break even point you could be losing money by refinancing. How can you evaluate your potential savings from refinancing? You’ll need to shop for rate quotes; however, the rate quotes you receive online or from a mortgage broker include commission based markup. If you want the absolute lowest mortgage rate possible you’ll need to get a wholesale rate. (more on wholesale rates later)

Which Term Length?

If you refinance with a 30 year mortgage you’ll be starting your loan amortization from scratch. What is amortization? It simply describes the process of repaying a mortgage loan over time. Mortgages are front loaded with interest so in the early years the majority of your payment is applied to interest and you build equity in your home at a very slow rate. This could be considered a disadvantage to refinancing, especially if you tap into your equity in the process. Another option is to choose a shorter term like 15 years. Your payments will be higher but you’ll build equity in your home at a faster rate and pay less to the lender in finance charges.

Refinancing now won’t hurt your chances of qualifying for another mortgage several months or a year from now if you sell your home. You just won’t be able to recoup all of the expenses you pay when taking out the new mortgage. Also, make sure your existing loan does not include a prepayment penalty, or if it does that you include this fee in your cost vs. savings analysis.

Is it too early to refinance my mortgage?

If you just purchased your home within the last year and have an interest rate 6 percent or higher, is refinancing worth it? There are no rules saying that you have to wait a certain amount of time before refinancing; you only need to calculate your break even point and make sure that you factor in the prepayment penalty if you have one.

What About Wholesale Mortgage Rates?

The mortgage industry has a dirty little secret that you need to be aware of. All rate quotes you receive online or from your broker include commission based markup. The problem with this markup is that you’re already paying the broker an origination fee for their services; in addition to this fee the broker marks up your mortgage rate for a commission without fully disclosing what they’re doing. The commission your broker receives for marking up your mortgage rate is called Yield Spread Premium and according to the Secretary of Housing and Urban development is the reason American homeowners will overpay nearly sixteen billion dollars for their home loans this year.

The good news for you today is that you can avoid Yield Spread Premium and refinance your home with a wholesale mortgage rate. Register for our free video tutorial and you’ll learn how to recognize Yield Spread Premium, negotiate to avoid paying it, and avoid lender junk fees when refinancing. Sign up today and get in while these videos are still a free offer.