Common Mortgage Mistakes That Cost You Thousands of Dollars

If you’re searching for the best refinance company for your next home loan and want to avoid common mortgage mistakes you’ve come to the right place. Most homeowners dive into their mortgage refi with a reckless abandon that ends up costing them thousands of dollars in junk fees and unnecessary markup. Here are several of my best tips before you refi to help you avoid making these common mortgage mistakes.

Not Doing Your Homework Before Mortgage Refinancing

A recent survey by one financial blogger I follow indicates that the overwhelming majority of homeowners in the United States lack an understanding of mortgage basics. Terms like loan amortization and yield spread premium tend to draw bank stares masking panic for many homeowners when the topic of how to refinance a mortgage comes up.

The fact is that not learning mortgage basics accounts for homeowners in the United States losing sixteen billion dollars each year according to the Secretary of Housing and Urban Development. RefiAdvisor makes it easy not only to learn the basics but shows you how get the best refinance without paying junk fees or unnecessary markup of your mortgage rates.

Paying for Yield Spread Premium Instead of Loan Origination Fees

Another item on the list of common mortgage mistakes is the loan origination fee. This is the fee paid to the broker arranging your mortgage refi and a reasonable amount to pay for the mortgage origination fee is one percent of your home loan. Many brokers will tell you that you can save yourself a bundle at closing by letting the lender pay this fee for you, which sounds great until you see what it does to your monthly payments.

Why would the lender pay your loan origination fee in the first place? Lenders pay a fee called Yield Spread Premium to the broker arranging your mortgage refi for locking and closing your home loan with a higher than necessary interest rate. Lenders do this because they know that home loans with higher than necessary interest rates bring them premium profits when these loans are sold to investors on the secondary mortgage market.

The problem with this unnecessary markup of your interest rate (one of the most common mortgage mistakes) is that it drives up your payments by as much as $100 a month in many cases for the entire duration of your home loan. That’s as much as $1200 a year that you’ll be overpaying when you could have paid the loan origination fee upfront and walked away with lower payments for the entire duration of your loan.

It’s worth noting that recent changes to the laws regulating mortgage broker compensation changed in 2011 and your broker is now prohibited from charging you both a loan origination fee and taking yield spread premium from the lender. Don’t let a fast talking broker convince you that it’s better to let the lender pay your origination fee just to save a few bucks at closing.

Banks Might Not Be The Best Refinance Company

It’s true that banks are very convenient when it comes to getting your mortgage refi done and Bank of America is touting some very attractive rates at the moment; however, your bank might not be the best choice when it comes to paying unnecessary fees. The reason is that your bank is exempt from the Real Estate Settlement Procedures Act, including all the new changes to the law intended to protect homeowners from predatory lending practices. The Banking Lobby spent millions of dollars in the 1990s lobbying congress for banks to be exempt from this important legislation and was successful.

Bank originated mortgage loans are on my list of common mortgage mistakes for the simple question of why would you choose a lender for something as important as your mortgage refi that doesn’t have to play by the rules?

You can learn more about avoiding common mortgage mistakes like paying for yield spread premium and lender 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 on the road to your best refinance ever without overpaying one penny.

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.

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…

Best Home Mortgage Refinancing Company

Are you looking for a new home loan and want the best home mortgage refinancing company? Did you know that according to the Secretary of Housing and Urban Development your friends and neighbors in the States will overpay sixteen billion dollars for their home loans this year alone? Here are several of my best tips for finding a home mortgage refinancing company that won’t charge you junk fees or slip hidden markup into your next home loan.

Home Mortgage Refinancing Company 101

Should you choose a home mortgage refinancing company for your next home loan or just refinance with your bank? Bank originated home loans are fast and convenient; however, what you don’t know about your bank could cost you. First of all, banks are exempt from the Real Estate Settlement Procedures Act, which requires lenders to disclose their markup and profit margin on your home loan. If you don’t care about that and want the convenience of a bank originated home loan then read no further; however, if you want the lowest possible mortgage rate without junk fees RESPA is important to understand.

In the 1990s the Banking Lobby in the United States successfully lobbied Congress to have RESPA laws changed excluding your bank from legislation that protects American homeowners from predatory lending practices. Your bank is only required to give you an Annual Percentage Rate based on their marketing department’s fictitious Good Faith Estimate. If you love your bank you might think about taking out a mortgage from them; however, why would you consider any lender that doesn’t have to play by the rules in place to protect you from abuse?

Mortgage Yield Spread Premium

Another term you need to be familiar with before choosing a home mortgage refinancing company is Yield Spread Premium. This is a fee lenders pay to any broker that locks and closes your home loan with a higher than necessary mortgage rate. Mortgage lenders do this because they know home loans with higher than market interest rates bring them a premium profit when sold to investors on the secondary market. Think of Yield Spread Premium as an incentive and a kickback from the lender for overcharging you. You can find this lender paid compensation on your HUD-1 settlement statement; however, most brokers have clever ways of explaining this compensation away.

You Can Get Wholesale Mortgage Rates

Most mortgage brokers will tell you that you can’t get wholesale rates from your home mortgage refinancing company because they don’t want to give up this extra commission paid by the lender for overcharging you. Truth be told, it is possible to pay a flat origination fee of one percent to get a mortgage rate that hasn’t been marked up for Yield Spread Premium without paying junk fees. You just have to find the right broker to arrange your new home loan with the best home mortgage refinancing company. You don’t have to be a personal finance guru or have a relative in the business to get the kind of deal I’m describing here; you just need to find the right person for the job.

You can learn more about finding the best mortgage refinancing company without Yield Spread Premium or 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 mortgage refinancing with wholesale rates today.

Choosing The Best Refinance Companies When Mortgage Refinancing

Mortgage refinancing in today’s economy isn’t rocket science; however, it helps to have the right people in your corner to arrange your next home loan. Should you choose a big-named company like Amerisave when mortgage refinancing or is that small-time broker your safe bet for getting the best deal? Did you know that the according to the Secretary of Housing and Urban Development homeowners in the United States will overpay nearly sixteen billion dollars this year along because of hidden markup and junk fees? Here are several of my best tips for choosing the best refinance companies for your home loan while avoiding hidden markup and junk fees.

Mortgages for Dummies

You don’t have to be a personal finance guru to get the best deal when mortgage refinancing, you just have to find the right person to arrange your next home loan. How do you find the right person? Let me start by fist describing who the wrong person is for your next home loan.

Mortgage brokers get paid several different ways for arranging mortgage refinancing. Your broker can charge you a loan origination fee for arranging your new home loan or accept lender paid compensation. (Sometimes even both)

Wait a minute! Why would the lender pay for your mortgage broker’s work when arranging your mortgage refinancing? After all, if the broker’s fee isn’t coming out of your pocket isn’t that a win? Consider why the lender would pay this fee and you’ll quickly discover this lender paid mortgage refinancing compensation needs to be avoided at all costs…

Yield Spread Premium

Lenders reward brokers for locking and closing mortgage refinancing home loans with higher than necessary mortgage rates with a fee known as Yield Spread Premium. Simply put, for every .25% that your mortgage broker gets you to unknowingly agree to overpay the lenders pay them a kickback of 1.0% of your home loan amount. Lenders do this because home loans with higher than market interest rates bring them boocoo profits when the loans are sold to investors on the secondary market.

Do you think the broker is going to tell you that they’re marking up your mortgage rate? While it’s true that recent changes to the Real Estate Settlement Procedures Act require brokers to disclose Yield Spread Premium along with their origination fee; however, they all have clever ways of explaining it away for the uninitiated homeowner. I mean really, why should you worry about a fee that’s coming out of some else’s pocket?

Hidden Markup & Junk Fees, Oh My!

It’s true with anything that trusting the wrong person can lead to disaster. When it comes to your home loan how do you find someone or the best refinance companies that you can trust? Not all mortgage brokers are used car salesmen looking to make a buck at your expense; there are plenty of honest, hardworking brokers out there. In fact, one of them left me a comment today that I should be “expelled” from the country for publishing what I write here. (Everyone’s entitled to his or her own opinion…it is after all a free country…)

You Can Get Wholesale Mortgage Rates

I said earlier that you don’t have to be a financial guru to walk away with a home loan that’ll make your neighbors green with envy; you just have to find the right person to arrange your mortgage refinancing. How do you find the right person when mortgage refinancing? Many large companies like Amerisave Mortgage have high overhead and may not be able to negotiate the kind of deal that gets you wholesale mortgage rates. Look for local, self-employed brokers in your area (working from home is ideal) and tell this person that you understand how Yield Spread Premium works and will not accept mortgage refinancing that includes hidden markup or junk fees.

You can learn more about mortgage refinancing with wholesale interest rates without junk fees by checking out my Underground Mortgage Refinancing Videos.

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

Here’s a sample to get you started on the path to a wholesale interest rate for your next home loan.