Mortgage Refinancing Advice You Need Today

If you’re considering mortgage refinancing this year there are several things you need to know that will save you thousands of dollars. Did you know that according to the Secretary of Housing and Urban Development homeowners in the United States (your neighbors) will overpay sixteen billion dollars this year for their home loans? You’ll want to keep reading this article today because I’m going to share my best tips for avoiding the unnecessary markup and hidden junk fees responsible for paying too much.

Mortgage Refinancing Without Overpaying

What is this hidden markup of your home refi that I’m talking about? It all has to do with the way mortgage brokers are compensated for arranging your mortgage refinancing. Many brokers slip hidden markup into your mortgage rate after charging you an origination fee and then tell you not to worry about the lender paid compensation on your HUD-1 Statement because that fee isn’t coming out of your pocket.

The fee I’m talking about is called mortgage Yield Spread Premium. What you need to know about the fee is that lenders reward brokers for locking and closing home loans with higher than necessary mortgage rates. Your broker knows the lowest rate your lender will approve you when mortgage refinancing; however, they mark that rate up to collect Yield Spread Premium from the lender. This markup of your interest rate when mortgage refinancing is not only unnecessary because you’re paying the broker a perfectly good origination fee, but drives up your payments for the entire duration of your new home loan.

Yield Spread Premium in Action

Here’s an example to illustrate my point for the need to avoid hidden markup when mortgage refinancing. Suppose for example you decide mortgage refinancing makes sense for $375,000. Your broker quotes you an interest rate of 6.25% and charges you an origination fee of 1.5%. The loan origination fee you’re paying is for the broker’s work when mortgage refinancing; however, in this case 1.0% is more than reasonable compensation. The fact that the broker is charging you a point and a half means you’ll have to pay $5,625 at closing when you should only be paying $3,750.

What your broker isn’t telling you about his home loan and what you probably wont find in your loan documents (unless you know what to look for) is that the lender actually approved you for mortgage refinancing at 5.75% and the broker marked your interest rate up to collect 2% more. Yield Spread Premium pays one percent of your loan amount for every .25% you overpay when mortgage refinancing.

What does this hidden markup do to your payments? Well, at 6.25% your payment on a thirty-year fixed-rate home loan will be $2,308. If you had the mortgage rate you deserve at 5.75% you’d only be paying $2,188. That’s a difference of $120 per month and a whopping $1,440 every year you’re throwing away just for trusting the wrong person to arrange your home loan.

Comparison shopping for a new home loan when mortgage refinancing isn’t about comparing interest rates and fees; it’s about finding the right person wiling to work for a flat origination fee of one percent without taking Yield Spread Premium on your home loan. There are plenty of honest, hard-working brokers out there mixed in with the mortgage fat cats…you just need to find the right broker to arrange your next home loan.

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

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

Here’s a quick sample to show you what’s possible when refinancing your home with wholesale mortgage rates.

Mortgage Rate Watch

If you’ve been keeping an eye on recent mortgage rate trends or are searching the web for mortgage rates before refinancing your home there are several things you need to know about mortgage quotes you find online. Internet mortgage giants and even your local mom and pop mortgage broker quote mortgage rates that have been marked up to create the commission known as Yield Spread Premium. Never heard of Yield Spread Premium? Don’t sweat it, neither have 98% of your neighbors. According to the Secretary of Housing and Urban Development your neighbors, in fact most Americans, will overpay sixteen billion dollars for their home loans this year alone. Here’s how you can avoid being part of this statistic and get the best mortgage refinancing rates for your next home loan without paying unnecessary closing costs.

Yield Spread Premium Definition

So what is this Yield Spread Premium? Simply put it is a commission paid by the lender to the person arranging your mortgage for locking and closing with a higher than necessary mortgage rate. Yield Spread Premium is paid in addition to loan origination fees you’re already paying this person for the work they do arranging your home loan. Think of Yield Spread Premium as a form of “double dipping” at your expense.

You might think “Why do I care about Yield Spread Premium if the fee is being paid by the lender and not coming out of my pocket?” This is in fact an argument put forth by many mortgage brokers. They tell you not worry about the paid outside of closing (POC charges) found on your Good Faith Estimate and HUD-1 Settlement Statement because the fees are paid by the lender. Think for a moment why would the lender pay this fee for you? I mean really, what’s in it for them? We’ve all learned how evil and greedy banks and credit card companies are after the recent financial bailouts so why would they do anything that cost them a buck?

The reason mortgage lenders pay your mortgage broker Yield Spread Premium is because there IS something in it for them. In fact, Yield Spread Premium is the reason lenders realize the majority of their profits on your home mortgage loan. You see lenders don’t just sit around collecting interest from your home loan to make a buck. Mortgage lenders sell their home loans to investors on the secondary market. Home loans with higher than market mortgage rates bring them the most profit. This is why mortgage lenders reward mortgage brokers for closing loans with higher than necessary mortgage rates…the higher the mortgage rate, the higher the reward. Unfortunately for you, the higher your mortgage rate, the higher your monthly payment will be; however, an unnecessarily high mortgage payment can be avoided.

Avoiding Yield Spread Premium

Feeling overwhelmed with the prospect of refinancing your mortgage? Don’t sweat it…you don’t have to be a financial guru to get a wholesale mortgage rate that doesn’t include Yield Spread Premium. All you need to do to avoid this unnecessary markup is find the right person to arrange your next home loan. Start by approaching local mortgage brokers and tell them you understand how Yield Spread Premium works. Offer to pay a flat origination fee for their services of one percent and be sure to tell them that you won’t accept any mortgage loan that includes Yield Spread Premium.

You can learn more about getting a wholesale mortgage rate for your next home loan while avoiding unnecessary closing costs by registering for my free Underground Mortgage Videos.

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

Here’s a sample of what you get for free you sign up…this video shows why your neighbors pay too much for their home loans and how you can avoid unnecessary markup and junk fees.

Mortgage Rates Information

Are you considering a new mortgage loan and are looking online for Mortgage Rates Information? There are several things you need to know about the mortgage rate quotes that you get from a mortgage broker or find on the Internet that can result in overpaying thousands of dollars for your home mortgage.

Here are several tips to help you avoid paying too much when refinancing your home mortgage loan.

Mortgage Rates Information

How do mortgage rates work anyhow? With the exception of bank originated mortgage loans, mortgage rates come from wholesale lenders. These lenders don’t deal with the public directly but offer loans through mortgage brokers and other companies that resell their mortgage loans for a commission. This commission can come from two sources, the first being you and the second being the lender.

Mortgage Origination Fees

When your mortgage company or broker charges you a fee for arranging your loan this is called a loan origination fee and should appear on your Good Faith Estimate and HUD-1 Statement. A reasonable amount to pay for this origination fee is one percent of your loan amount and will be due at closing. Many mortgage brokers overcharge this origination fee and it’s not uncommon to find Good Faith Estimates with 2.5% or more. (That doesn’t mean you should pay it though…)

The second commission you need to be aware of (and this one’s important) is a fee paid by the mortgage lender. Why should you be concerned about a fee paid by the mortgage lender? If the lender’s paying the fee it’s not coming out of your pocket right…or is it?

Why would the mortgage lender pay a fee to the broker for arranging your home loan? I mean, what’s in it for them, really? Mortgage lenders know that home loans with higher than market interest rates bring them a premium profit when the loans are sold on the secondary, or investor mortgage market. Your lender pays your mortgage broker a fee for locking and closing your home loan with a higher than necessary mortgage rate. This means your monthly payment is higher than it should be to give that broker a commission. (At your expense…)

Should the broker get a commission from the lender on top of what you’re already paying them for loan origination? Your broker probably thinks so; however, there are a number of upfront and honest mortgage brokers out there willing to refinance your home for a flat one percent origination fee without slipping in junk fees or marking up your mortgage rate. My Underground Mortgage Videos will show you exactly how to find this person.

What About Bank Mortgage Loans?

You might think that you can avoid mortgage broker markup and commission simply by refinancing with your bank. The problem is that your bank knows the same thing about making a profit from the secondary mortgage market by selling your home loan. There might not be a middleman marking up your mortgage rate to get a commission from the bank; however, the bank still marks up your mortgage rate to boost their profits when selling your loan. Another problem with your bank mortgage is thanks to the Banking Lobby in the United States, banks are exempt from the Real Estate Settlement Procedures Act and are not required to disclose any of their markup or profit margins on your loan.

Bottom line if you are considering taking out a mortgage loan from your bank: you’ll never get anything close do a par mortgage rate…

Par Mortgage Rates Definiton: Any interest rate you qualify for without having to pay points up front and does not create an “extra” commission for the person arranging your loan.

How to Get the Best Deal When Refinancing

Getting the best deal on your next home mortgage loan boils down to finding the right person to arrange it for you. There are plenty of honest mortgage brokers willing to work for a one percent origination fee without marking up your mortgage rate or throwing in junk fees. Who is the best mortgage broker to refinance your home loan? It’s probably not the broker working for a large firm with expensive office spaces or a company hummer. These brokers are simply unable or unwilling to negotiate the kind of deal described here when refinancing.

Tell your prospective mortgage brokers that you are willing to pay a one percent origination fee for their services and will not accept any loan that includes Yield Spread Premium. Remember, Yield Spread Premium is the commission paid by your lender when the mortgage broker locks and closes your home loan with a higher than necessary mortgage rate. Avoiding this unnecessary markup of your mortgage rate can save you thousands of dollars every year that you keep the loan.

You can learn more about refinancing your home for a flat one percent origination fee without paying unnecessary markup of your mortgage rate or junk fees at closing by registering for my Underground Mortgage Videos. Register today and you’ll have instant online access to the mortgage videos and materials without downloading anything to your PC.

Mortgage Help Now

Are you considering taking out a new mortgage loan and don’t want to pay too much in the process? Are you unsure what to look for when comparing loan offers or how to screen mortgage brokers for the junk fee toting scam artists?

Mortgage rates are at all time loans but choosing the wrong person to arrange your new home loan could quickly become an expensive nightmare. Here are several tips to help you avoid paying too much for your next mortgage loan.

Getting Mortgage Help Now

The key to getting the best possible deal for your home loan is not finding the best lender, but finding the right person to arrange your loan. You don’t want to rely on a bank or a faceless mortgage giant for something as critical as your home mortgage loan; you need to find the right local, self-employed mortgage broker for the job. Why should your mortgage broker be self-employed? Large companies and brokerage firms working out of posh office spaces that employ expensive sales staff are going to be much less likely to broker the type of deal you’re looking for on your new home mortgage. Most mortgage companies simply have too much overhead and are not willing to negotiate fees. Found a self-employed mortgage broker working from home? Even better still…

What is a Good Deal on a Mortgage Loan?

Would you recognize a good deal on a mortgage loan if you found one? What makes one mortgage better than another? Is it fees from the lender or from the mortgage broker that you need to worry about? While there are underwriting fees that you’ll be required to pay, most lender fees are pretty standard when taking out a mortgage loan. The same can’t be said for mortgage broker fees… in fact the blame for most people overpaying for their home loans lies squarely with their mortgage brokers.

Mortgage Broker Compensation: What You Need to Know

Don’t get me wrong, mortgage brokers are providing a valuable service and deserve to be paid for their work; however, many brokers feel they have a right to more of your hard earned money than they deserve and use downright dirty tricks to get it. What you need to know about your mortgage broker is how they get paid for arranging your home loan. Brokers get paid in two ways; they charge you, the homeowner an origination fee for their services and they can get paid a commission by the lenders. You might think that it’s better to have the lender pay the mortgage broker’s fee than to have it come out of your pocket right? One problem with this line of reasoning is that you don’t always get to choose how your mortgage broker gets paid for arranging your loan. In fact, most brokers won’t tell you about the fee being paid by your lender and go to great lengths to hide it from you in your loan documents. Why do you think that is?

First, let’s talk about the origination fee. What is a reasonable amount to pay your mortgage broker for loan origination? Plain and simple: one percent, and not a penny more. Not one and a half percent, not two percent and for God’s sake not three percent. One of my readers commented recently that her mortgage broker charged her 1.5 percent not for the origination fee, but to lock in her mortgage rate on top of the origination fee! (Gobsmacked by the nerve of that broker) Here’s a tip… rate lock fees are pure garbage. There isn’t a single lender out there that charges a fee for locking in your mortgage rate. One percent for loan origination is more than ample compensation for the work your mortgage broker does arranging your loan.

Now what about this lender paid mortgage broker fee? Should you be concerned that the lender is paying your mortgage broker a fee for arranging your home loan? It’s not the fact that this fee is being paid by the lender that should concern you, but why the lender is paying your broker that should worry you. Why would your mortgage lender pay the broker a fee when you’re already paying a mortgage origination fee? What’s in it for them? Mortgage lenders reward brokers for locking and closing home loans with higher than market mortgage rates with a fee known as Yield Spread Premium. That’s right, for every .25 percent that your broker marks up your mortgage rate the lender pays them a commission of 1.0 percent of your loan amount. Mortgage lenders do this because home loans with above market mortgage rates bring them a premium profit when the loans are sold on the secondary market.

This one percent commission from the lender is paid in addition to the origination fee you’re already paying the mortgage broker at closing! You can see how Yield Spread Premium can effectively double, even triple your mortgage broker’s compensation for arranging your loan and why many brokers become defensive, even angry when questioned about it. You should see some of the scathing comments and emails I receive from mortgage brokers who think they are “entitled” to this fee paid by the lender at your expense. This brings me to my next point… if the mortgage broker is marking up your mortgage rate for a commission what does this do to your monthly payment amount?

Mortgage Help Is Available

Suppose for example you are refinancing your home mortgage for $315,000. Your mortgage broker quotes you an interest rate of 5.50 percent. Not bad… on a thirty year, fixed-rate mortgage your payment at 5.50 percent interest will be $1,790 per month. What you don’t know is that you actually qualified for 5.0 percent and if you had the mortgage rate that you deserve your monthly payment would have been only $1,690! That’s $1,200 per year down the drain every year just to give the mortgage broker a commission at your expense! Adding insult to injury you’re paying this mortgage broker $3,150 out of your own pocket for arranging this loan! (And that’s only if the broker agreed to a one percent origination fee…)

The good news is that you don’t have to throw your money away for an unnecessary mortgage broker commission. To learn more about avoiding Yield Spread Premium and other junk fees like mortgage rate lock fees register for my Underground Mortgage Videos. You’ll get immediate access to these online videos in the password protected member’s area without downloading anything to your home computer.

Home Mortgage Refinance

Considering refinancing your home mortgage loan this year?

A home mortgage refinance can save you a lot of money if you go about it the right way. Did you know the mortgage rate you have on your home now was marked up by the person arranging your loan for a commission?

You’ve been paying too much ever since purchasing your home just to give that mortgage broker a commission from the lender. Don’t worry; you’re not alone… in fact, according to the Secretary of Housing and Urban Development this hidden mortgage commission will cost homeowners in the United States sixteen billion dollars this year alone. Want to save a few thousand bucks on your next mortgage loan? Read on… I’ve got the low down on refinancing your home loan for you without paying too much for your next mortgage loan.

Home Mortgage Refinance Tips

You don’t have to be a financial guru to get a good deal on your next mortgage loan. Mortgage loans are retail products like anything else you buy today; you just need to know how to recognize and avoid the crap people are shoveling to make a buck at your expense. Mortgage brokers have earned themselves a reputation for being sleazy used car salesman in recent years… and rightly so. This doesn’t mean you should avoid using a mortgage broker when refinancing your home. Mortgage brokers have access to wholesale mortgage rates which is something you’ll never get from a bank or credit union.

Wholesale Mortgage Rates

You’re familiar with wholesale prices when it comes to retail products but what about mortgage loans? Mortgage rates are no different; in fact, home loans are retail products being resold by mortgage companies and brokers for a commission. How to mortgage companies and brokers make their money? They make money from two places: you and your mortgage lender.

Your mortgage company or broker can charge you an origination fee, often called “origination points” for their part in arranging your home loan. This fee is often overcharged. A reasonable fee for loan origination is one percent of your mortgage amount but it’s not uncommon to see this fee as high as three to five percent. Never pay this much for a mortgage broker origination fee.

The second source of compensation for your Mortgage Company or broker is a little known kickback called Yield Spread Premium. Simply put this is a fee paid by the lender when your loan originator locks and closes your home loan with a higher than market mortgage rate. You’ll see market or the so called wholesale mortgage rates referred to as par mortgage rates.

Par Mortgage Rates

A par mortgage rate is simply one that does not cost you anything to get or create any money for the Mortgage Company or broker arranging your home loan. Mortgage rates that cost you money require discount points be paid at closing. Remember that one point is one percent of your mortgage amount and a discount point is a fee paid to lower your mortgage rate. If you have to pay cash at closing to qualify for a specific mortgage rate this is not a par rate; likewise if your mortgage rate creates a commission for the broker it is not a par rate either. If you want the best possible deal when refinancing your home loan you want to get as close to a par mortgage rate as possible.

Avoiding the unnecessary markup of your mortgage rate to generate a commission for the mortgage broker is easier than it sounds. You just need to find the right broker for the job and forget about refinancing with your bank or credit union. Banks fund their loans with the banks money and are not required under the current disclosure laws to tell you how they’ve marked up your interest rate. Compare a par rate to your banks “great deal” and you’ll see how much they overcharge their customers.

You can learn more about a Home Mortgage Refinance with par mortgage rates without paying lender junk fees in the process by registering for my free Underground Mortgage Videos. Register Today and you’ll have immediate access to the membership area without downloading anything to your PC.