Who Are The Best Refinance Companies For Your Next Mortgage?

Are you shopping for the best refinance companies for your next home loan and want to avoid unnecessary fees? Choosing a big company like Amerisave doesn’t guarantee you’ll get the lowest refinance mortgage rates; in fact, there are a number of common mortgage mistakes that can cost you thousands, even with the best refinance companies. Here are several tips before you refi to help you find the best refinance companies without overpaying the lender or your mortgage broker at closing.

Shopping For The Best Refinance Companies

Most people approach shopping for the best refinance companies by collecting Good Faith Estimates (GFE) from lenders online or out of the phone book. The problem with this approach is that you can’t get an apples-to-apples comparison from different lenders using the Good Faith Estimate due to a lack of standards in our disclosure laws. The GFE is little more than a marketing tool used by lenders to promote overpriced home loans. If you make your choice from the best refinance companies based on the GFE you’re almost guaranteed to overpay.

Enlisting the Help of a Mortgage Broker

Instead of shopping for the best refinance companies like your neighbors did a more sensible approach to mortgage refinancing is to find the right person to arrange your next home loan. Brokers have access to today’s lowest refinance mortgage rates and a good one can cut through all the crap lenders are pulling to boost their profits in today’s economy. Sure you’re going to pay a loan origination fee for the broker’s services; however, finding the right person can save you thousands of dollars in unnecessary fees and markup over the lifetime of your home loan. Brokers are especially helpful if you have credit challenges and need help choosing the right program to get you qualified for mortgage refinancing.

Do Your Homework Before Applying

It’s a good idea to learn how mortgage refinancing works and what fees you can reasonable expect to pay; however, the most common mortgage mistake is overlooking your credit before applying with the best refinance companies. The refinance mortgage rates that you qualify for will most likely come in higher than what lenders are advertising because your quotes depend on your credit score and loan-to-value ratio (LTV). Unless you have the cash on hand for cash-in refinancing there isn’t much you can do to improve your LTV; however, improving your credit score and therefore mortgage rate is something even the most financially clumsy homeowner can do.

How to Improve Your Credit Score Before Mortgage Refinancing

Here’s an illustration to show you how your credit score affects the refinance mortgage rates you’ll get and the amount you’ll pay for your home over time:

credit mortgage rate Who Are The Best Refinance Companies For Your Next Mortgage?

As you can clearly see the lower your credit score, the higher your mortgage payments and finance charges are going to be over time. Many homeowners are intimidated by their credit reports and scores; however, they’re really not as scary as you might think.

Before you can think about applying with the best refinance companies it’s a good idea to check your credit reports for mistakes. If you have mistakes in your credit reports your credit score will be lower than it should be. (through no fault of your own)

The website AnnualCreditReport.com enables you access to all three credit reports for free without buying anything once per year. (The credit bureaus aren’t just being nice, they’re required by law)

If you find that you have inaccurate information in your credit reports you’ll need to file disputes with each credit bureau and allow enough time for the correction to be made and be reflected in your credit score before shopping for the best refinance companies. Once your certain that the information in your credit reports is correct you can improve your FICO score by paying down the balances on your credit cards as much as possible and avoiding taking out new accounts for at least 90 days before applying for a new home loan.

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You can learn more about finding the best refinance companies for your next home loan with my free Underground Mortgage Videos.

httpv://www.youtube.com/watch?v=be9md0A0_2c
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Here’s a quick sample to get you started finding the best refinance companies for your next mortgage loan without overpaying…

4 Mortgage Refinancing Roadblocks

If you’re considering taking advantage of today’s low refinance mortgage rates, there are several roadblocks that could prevent you from qualifying. Your home’s loan-to-value ratio and credit status all weigh heavily on your application for mortgage refinancing. Here are four costly roadblocks you’ll want to avoid when refinancing your home loan with one of the top mortgage lenders like Amerisave.

Your Mortgage Loan-to-Value Ratio

One of the most common reasons for having your mortgage refinancing application denied is not having enough home equity. If you’re underwater in your home and your loan-to-value ratio is higher than 125% it will be difficult to refinance, even under the government’s old HARP program. The new HARP 2.0 should be widely available by the first quarter of 2012, which will not have loan-to-value requirements, meaning homeowners who are underwater in their mortgages now will be able to take advantage of today’s low refinance mortgage rates.

Your Mortgage Loan is too Big

If you’re currently paying on a jumbo mortgage loan and you don’t have superb credit you may find mortgage refinancing is out of reach. If your current mortgage balance is more than $417,000 your loan is most likely categorized as jumbo. If you find your application is denied because it falls outside the conforming loan limit of $417,000, you may still be able to qualify for mortgage refinancing by paying down the balance (cash-in refinancing) below the limit. This will also lower your loan-to-value ratio and the mortgage refinancing rates that you’ll qualify.

Bad Credit Mortgage Refinancing

Another common barrier to mortgage refinancing is your credit score. One of the most common mortgage mistakes is neglecting to check your credit reports for mistakes before applying. If your credit score is less than 620 you could have problems getting your application approved. Depending on how close to 620 you are after getting approved you may find the refinance mortgage rates you’re being quoted are much higher than what lenders are advertising. If you have less than perfect credit you may find an FHA mortgage is more accessible and can get you approved for mortgage refinancing. You won’t qualify for the rates you’re seeing on television; however, your payment could still go down based on getting approved.

Lack of Documented Income

If you’re self-employed or have lost part of your income, lenders could deny your application for a new home loan. Stated income mortgages are a thing of the past which makes mortgage refinancing for the self-employed extremely difficult. If your application for mortgage refinancing is denied because of your income a co-borrower could get you approved. You might also try shopping around for another lender with different underwriting requirements.

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You can learn more about getting qualified for today’s lowest refinance mortgage rates without paying unnecessary fees by checking out my free Underground Mortgage Videos.

httpv://www.youtube.com/watch?v=be9md0A0_2c
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Here’s a quick sample to get you started with today’s lowest refinance mortgage rates for your next home loan…

Lowest Refinance Rates on Record Signal New Opportunities for Savvy Homeowners

If you’ve been following mortgage refinance rates from the sidelines because you’re not sure if you’ll qualify, it’s not too late to take advantage and slash hundreds of dollars from your payments. There are several things you should know about the refinance rates quotes you’ll receive when shopping for your mortgage refinance that will help you avoid common mortgage mistakes. Here are several of my best tips before you refi to help you avoid paying too much for your next home loan.

Interest rates on the most popular types of home loans are at record lows, according to HSH.com’s Weekly Mortgage Rate Radar.

The average rate for conforming 30 year fixed rate mortgages eased by a single basis point (0.01 percent) to 4.31 percent. Conforming 5/1 hybrid ARM rates fell by 5 basis points, closing the Wednesday to Tuesday wrap around weekly survey at an average rate of 3.11 percent.

Mortgage Refinance Rate Shopping Online

The Internet is an excellent resource for mortgage rate shopping; however, you might be frustrated to find that the quotes you’re receiving are higher than the lowest refinance rates lenders are advertising. This is because the mortgage refinance rates you’ll receive is based on your credit score and loan-to-value ratio; if the rates you’re being quoted are higher than what you’re seeing online the culprit is probably your FICO score.

Check Your FICO Score Before Refinancing

The graph below illustrates how mortgage refinance rates vary based on average credit scores. You can easily see the correlation between low FICO scores and higher mortgage rates, driving up the cost of your home loan over time. Fortunately, it’s relatively simple to make sure your credit isn’t keeping you from today’s lowest refinance rates. Congress passed a law several years ago requiring the credit bureaus to give you a free copy of your credit report every year.

credit mortgage rate Lowest Refinance Rates on Record Signal New Opportunities for Savvy Homeowners

It’s a good idea to visit the website annualcreditreport.com on a yearly basis, print out all three of your credit reports, and carefully check for mistakes. I say print out all three (Equifax, TransUnion, and Experian) because these agencies are prone to errors and don’t always share information. If you find mistakes in your credit reports there is a procedure for disputing errors.

What About Lender Junk Fees?

One of the most common mortgage mistakes homeowners make when refinancing is focusing only on getting the lowest refinance rates at the expense of fees. Did you know that your closing costs and loan origination fees are negotiable and vary widely from one lender and broker to the next? And what about that mortgage loan origination fee? What’s a reasonable amount to pay the person arranging your mortgage refi?

The broker’s origination fee is a common cause of overpaying for any mortgage refi; however, a reasonable amount to pay the person arranging your new home loan is one percent of the loan amount. The broker fee is negotiable and while many brokers will quote you a fee higher than one percent, it’s not necessary to pay more. Don’t be afraid to haggle with prospective mortgage brokers over their fee.

As for junk fees there are a number of unnecessary closing costs (think rate lock fee) that do nothing but drive up your out-of-pocket expenses, making it difficult if not impossible to recoup your closing costs. The goal of mortgage refinancing is to save money right? How good of a deal you’re getting depends on the fees you’re paying and how long it’s going to recoup those fees from your lower payment amount.

You can quickly calculate how long it’s going to take to recoup your closing costs by adding up everything you’ll have to pay closing on your new home loan and dividing by the amount you’ll be saving each month. Here’s an example to illustrate how this works:

Suppose you’re refinancing your home for $250,000 at 4.5%. Your new mortgage payment on a 30-year, fixed mortgage will be $1,266. Your old payment based on a 6.5% interest rate was $1580, which represents a savings of ($1580-$1266=) $314 per month. It’s going to cost you $6,000 to refinance, so dividing your out-of-pocket costs by your savings ($6,000/314=) 19 months. This is the amount of time it’s going to take you to recoup that $6000 based on saving $314. (Which in this case is a really good deal) Your results will vary; however, it’s not uncommon for it to take five years or longer to recoup your closing costs. Don’t be frustrated if your mortgage refi results are not as favorable.

You can improve your results by negotiating to pay lower fees at closing while avoiding the junk. You don’t have to be a personal finance guru to pull this off; my free Underground Mortgage Videos have everything you need to slash hundreds, if not thousands of dollars from your out-of-pocket expenses.

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You can learn more about taking advantage of historically low refinance rates while avoiding unnecessary lender fees and common mortgage mistakes by checking out my free Underground Mortgage Videos.

httpv://www.youtube.com/watch?v=be9md0A0_2c
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Here’s a quick sample to started slashing thousands of dollars worth of fat from your next mortgage refinance.

Jumbo Mortgage Rates Scam

If the value of your home is above the conforming loan limit for your region of the country, Jumbo Mortgage Rates are a concern for you when refinancing your home. What you might not know is what has your broker salivating over closing and is the hidden markup found in nearly all Jumbo Mortgage Rates. Here are the basics you need to know about refinancing with Jumbo Mortgage Rates to help you avoid paying too much at closing and thousands of dollars every year in hidden markup.

Jumbo Mortgage Rates Basics

If the dollar amount of your home loan is above the conforming loan limit set each year by Fannie Mae and Freddie Mac you have a jumbo mortgage loan. This means that Fannie Mae and Freddie Mac won’t back the entire amount of your home loan. Because of this, Jumbo Mortgage Rates are typically higher than interest rates found on conforming home loans because the lender is assuming more risk of foreclosure.

What you need to know about Jumbo Mortgage Rates is while it’s true you may not be able to avoid this risk based markup by the lender, what you need to avoid at all costs is commission based markup by the broker. 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 alone due to commission based markup of their home loans? Most homeowners have never heard of the fee lenders pay for this markup known as Yield Spread Premium, let alone what it does to their monthly payments.

Avoiding Hidden Mortgage Markup

The good news is that you don’t have to be a personal finance guru to avoid unnecessary markup. I’m going to show you how to get as close to wholesale as possible when it comes to Jumbo Mortgage Rates. First of all, you’ll need a clear understanding of mortgage Yield Spread Premium (YSP). What is it? Simply put, YSP is a commission, fee, kickback, whatever you’d like to call it paid to the person arranging your loan for locking and closing with higher than necessary Jumbo Mortgage Rates.

I say higher than necessary because both the broker and the lender know the lowest interest rate your loan can be approved; however, the broker salivating in the corner knows that if he locks and closes higher he’ll get a commission from that lender for overcharging you. Here’s an example to illustrate how this works.

Yield Spread Premium in Action

Suppose for example, you are refinancing your California jumbo home loan for $500,000. Your broker charges you an origination fee for their work of 1.5% and quotes you at 6.5%. This means your monthly payment on a fixed-rate, thirty year home loan will be $3,160. This is a serious payment to meet every month. What you don’t know about this home loan is that the lender actually approved you for Jumbo Mortgage Rates at 6.0%, and the broker marked it up to 6.5% without telling you.

How can this be legal you ask? Changes to the RESPA laws in 2010 did not abolish Yield Spread Premium like many homeowners think, the law only requires brokers to disclose the fee they receive for it alongside the origination fee they are charging you. The problem is most brokers are very good at explaining away Yield Spread Premium. “Hey that fee isn’t coming out of your pocket, don’t worry about it.”

So what does this hidden insidious markup of Jumbo Mortgage Rates do to your monthly payments? If you had the jumbo mortgage rates you deserve at 6.0% your monthly payment on the same home loan would only be $2,997. That’s a difference $163 per month, $1,956 per year all because the broker took advantage of you. Don’t let it worry you too much, the good news today is that now that you know about Yield Spread Premium you can avoid paying for it.

You can learn more about avoiding this hidden markup of your Jumbo Mortgage Rates by checking out my free Underground Mortgage Refinancing Videos.
httpv://www.youtube.com/watch?v=be9md0A0_2c
Here’s a quick sample that exposes the truth about this unnecessary commission known as Yield Spread Premium.