Home Refinance Advice You Can Use Now

Are you shopping for home refinance rates and have your heart set on a specific interest rate? Do you know that one of the most common mortgage mistakes is focusing on getting the lowest rate at the expense of fees? Carefully comparing home refinance offers and fees from a variety of lenders is the best way to ensure you’re not losing money when refinancing. Here’s how to comparison shop today’s best mortgage lenders and get a better deal than your neighbors for your next home loan.

Home Refinance Rate Shopping Tips

Here are five tips to help you get the lowest home refinance rates without overpaying lender fees at closing.

  1. Check Your Credit Reports First
  2. Before you start filling out forms for home refinance quotes you should focus on your credit. If you don’t, you’ll often find the quotes you’re getting are higher than what lenders are advertising. If so, the likely culprit is your credit score, assuming you have the necessary loan-to-value ratio. Nothing drags down your credit score like inaccurate information in your credit file.

    The government requires each of the three credit bureaus (Trans Union, Equifax, Experian) to provide you with access to your credit files once per year, at no charge, at AnnualCreditReport.com. You won’t get a credit score unless you pay for it; however, CreditKarma.com provides free access to your Trans Union credit score with no strings attached.

    Are you happy with your credit score? If you’re not, the quickest way to boost it is to pay down the balances on your credit cards below 30% of your limit.

  3. Request Home Refinance Quotes The Right Way
  4. The new Good Faith Estimate is an excellent tool for comparing home refinance rates and fees if used correctly. There’s two things you’ll need to do to make sure you’re getting an apples-to-apples comparison of home refinance fees with your quotes.

    First, make sure your quotes do not include discount points. There is a table on page three if you’d like to see if paying discount points is worthwhile; however, as a starting point make sure your home refinance quotes do not include points.

    Next, make sure all of your quotes are for the same mortgage program. If you need a 30-year fixed rate mortgage don’t let some fast-talking loan officer quote interest rates for a 30-year ARM. Comparing fees across different programs is like comparing apples to oranges and results in overpaying.

  5. Is Refinancing Worth It?
  6. Answering the question “Should I refinance?” before you do anything else can help you avoid an expensive mistake. You can figure out if a home refinance is worthwhile using a simple mortgage calculator like this one to approximate your break-even point.

    Simple Mortgage Calculator

    Loan Amount: Years: Interest Rate:

    Annual Taxes: Annual Insurance:

    Monthly Payment =

    Once you have an idea of what home refinance rates you’ll qualify and your approximate closing costs you can calculate your break-even point. First, determine what your new payment will be based on the refinance rates found on your Good Faith Estimate. The difference between your old payment and the new is your monthly savings.

    Divide your average closing costs by the amount you’ll be saving each month and this tells you the approximate number of months it’s going to take to recoup your out-of-pocket expenses. Assuming you break even and you’re comfortable with the amount of time, then a home refinance is probably worthwhile.

    Note that this is only an approximation because it doesn’t factor in changes in term-length or things like taxes. As long as you’re keeping the same term-length or going shorter it’s still good enough to make an informed decision if refinancing is worthwhile.

  7. Shop From a Variety of Lenders, Banks, & Credit Unions
  8. Don’t automatically assume that your bank is going to offer you competitive refinance rates and fees. Some of the best deals I’ve found have come from small community
    credit unions. Mortgage brokers can be an excellent resource for home refinance shopping if you don’t have the time to comparison shop.

    Also, don’t let the fact that you’re not a credit union member discourage you from rate shopping credit unions. Many credit unions relax their membership requirements so they can market home loans beyond their local membership base. The more comparison shopping you do the better your chances of finding a great deal.

    The only catch with home refinance rate shopping is that you need to take steps to protect your credit score from lender inquiries. When a mortgage lender runs your credit you’ll get a hard inquiry on your credit report which lowers your score. The trick is to limit all of your home refinance rate shopping to a 14-day period and you’ll only get dinged on your credit once. Make sure when you’re requesting quotes that you provide your Social Security number and that you limit quotes to that two week window.

  9. Use Your Good Faith Estimate to Compare Fees
  10. The loan origination fee is one area where you can save or lose the most money on your home refinance. Many loan officers will tell you that one percent is standard for the mortgage origination fee; however, I’ve seen community credit unions charge as little as $400 for loan origination. You can find the loan origination fee on page two, item one of section A of the Good Faith Estimate.

    The next thing you’ll want to consider on your Good Faith Estimate is the Yield Spread Premium found in item 2 of section A. This is a credit the lender is giving you for accepting home refinance rates that are higher than the going rate. The credit is used to pay your loan origination fee and other settlement costs.

    The problem with accepting Yield Spread Premium on your home refinance is that while it reduces or even eliminates your out-of-pocket expenses, it drives up your monthly payment. If you plan on keeping the mortgage for any length of time (the average homeowner refinances every 4-5 years) you’ll break even for what the lender credited you and start losing money.

    In most cases you’ll want to pay your own closing costs if you’re able. The exception is if you know you’re going to be selling within five years and can avoid a prepayment penalty.

    Home refinance closing costs average two to three percent of your mortgage amount. The less you pay for loan origination and the lender fees found on page two of your Good Faith Estimate the more you’ll benefit from current mortgage rates.

Invest an hour or two using these tips and you can shave thousands of dollars from your out-of-pocket expenses on your home refinance.

Click Here For More Details…

You can learn more about paying less refinancing with today’s best mortgage lenders 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 help you get the lowest home refinance rates from today’s best mortgage lenders…”

Should I Refinance Now That Current Mortgage Rates Are Rising?

Do current mortgage rates have you asking the question should I refinance my home? Demand for refinance rates is down significantly now that current mortgage rates are pulling away from record lows. Did you miss out on historically low rates or should you act now before current mortgage rates climb higher? Here are several tips before you refi to help you answer the question “Should I Refinance” before it’s too late.

Should I Refinance My Home Loan?

While it’s true that the average refinance mortgage rates on a 30-year fixed-rate home loan have recently gone up by 1/5 a percentage point they’re still near all-time-lows.

The simplest way to answer the question “Should I Refinance” is to look at how long it’s going to take you to break even recouping the costs of taking out a new home loan. Every mortgage has settlement charges like the loan origination fee that have to be paid at closing, either by you or someone else.

The more you pay closing on your refi the longer it’s going to take you to break even before you start benefiting from current mortgage rates. One of the most common mistakes you can make is focusing only on getting the lowest current mortgage rates at the expense of fees. When you compare quotes from today’s best lenders it’s important to compare current mortgage rates AND fees. Here’s how to get the lowest refinance mortgage rates and fees using the new Good Faith Estimate.

Don’t Forget to Check Your Credit First

Once you’ve answered the question “should I refinance” you’re ready to start shopping from today’s best mortgage lenders… almost.

When’s the last time you checked your credit reports and score? If you aren’t saying on top of your credit reports you might find that mistakes are dragging down your credit score. Have you already started shopping for a lender and are finding the refinance mortgage rates you’re being offered are higher than what lenders are advertising? The likely culprit is your credit score.

Before you do anything else go to the government-mandated website AnnualCreditReport.com and review all three of your credit reports from TransUnion, Experian and Equifax. The government requires the three credit bureaus to give you access to your credit reports every year but doesn’t require they give you a credit score. If you’d rather not pay for your credit score you can get your TransUnion score for free at CreditKarma.com with no strings attached.

You’ll find that credit scores vary between the three bureaus and mortgage lenders rely on your middle score when quoting refinance mortgage rates. If your scores are 680, 700, and 710 at Equifax, Experian and TransUnion your middle score is 700. Not happy with your credit score? The fastest way to boost it is by paying down the balances of your credit cards below 30% of your limit. Don’t zero them out completely, it actually helps to carry a small balance.

How to Compare Current Mortgage Rates & Fees

Now that you’re ready to begin shopping from today’s best mortgage lenders you want to start requesting quotes. There is a right way to request mortgage refinance quotes that doesn’t waste your time and protects your credit score.

First, make sure the refinance mortgage quotes that you’re getting do not include discount points. Paying points with current mortgage rates makes no sense. You’ll find that lenders advertise interest rates that include points first because they’re lower and seem more attractive. If you’re curious as to how discount points affects your payments there is a table on page three of the Good Faith Estimate but as a starting point make sure your quotes do not include discount points.

Second, make sure you’re giving the loan officer your Social Security Number to get an accurate refinance quote. Some homeowners refuse to give their Social Security Number because they think they’re protecting their credit score from lender inquiries. While it’s true that lender inquires do lower your credit score it’s the only way to get an accurate quote.

If you don’t provide your Social Security number you’re relying on the loan officer’s best guess for your refinance mortgage rates. You need accurate quotes to answer the question “Should I Refinance” and giving your SSN is the only way to get them.

You can protect your credit score from excessive lender inquiries by limiting all of your refinancing quotes to a 14-day period. If you do this your credit score will only get dinged for one lender inquiry.

How to Use the Good Faith Estimate to Shop for the Best Mortgage Lenders

Keep in mind that the Good Faith Estimate is just an estimate but it’s the best way to compare offers from different lenders. Also, make sure you’re comparing refinancing offers from identical mortgage offers. It makes no sense to compare refinance mortgage rates from a 15-year fixed rate home loan to a 30-year adjustable rate mortgage. Your quotes need to be for identical mortgage programs. That’s the only way to make an apples-to-apples comparison of lender fees.

Next, use page two of your Good Faith Estimate to comparison shop mortgage origination fees. Most brokers will tell you that paying one percent of your home loan is standard for the loan origination fee. This is the fee paid to the person or company arranging your home loan and I’ve found community credit unions that charge as little as $400 for loan origination. Remember, the less you pay settling on your new home loan the quicker you break even and the faster you’ll benefit from today’s refinance mortgage rates.

Beware Mortgage Yield Spread Premium

Huh? Yield Spread what? This is a credit found on page two, box 2a of your Good Faith Estimate, and yes, Yield Spread Premium is still legal. The only thing that changed is that mortgage brokers are not allowed to take the credit as a commission.

What is Yield Spread Premium? Simply put, it’s a credit you get for accepting higher than market refinance rates. Think of Yield Spread Premium as discount points in reverse. For every .25% you allow the lender to mark up your interest rate you’ll get a credit of one percent of your loan amount. This credit is used to pay your origination fee and other settlement costs.

The higher your closing costs the more markup you’ll need to cover. This is how those “no fee” and “no cash out-of-pocket” mortgage refinancing offers work. The problem with accepting Yield Spread Premium is that you’re giving up the lowest current mortgage rates which means you’ll have a higher payment for the entire time you keep the loan. Instead of breaking even you’re going to reach a point where you’re losing money by having the lender cover your closing costs. If you can afford the fees it’s almost always better to pay closing costs yourself if you plan on keeping your home.

How to Calculate Your Break-Even Point

Are you still questioning should I refinance? One way to put your mind at ease about paying for a new home loan is to calculate how long it’s going to take to recoup your out-of-pocket expenses. You can use a simple mortgage calculator like this one to calculate the number of months it’s going to take you to reach your break-even point.

Simple Mortgage Calculator

Loan Amount: Years: Mortgage Rate:

Annual Taxes: Annual Insurance:

Monthly Payment =

Once you know how much your monthly payment is going down from current mortgage rates divide your total closing costs by your savings. (The difference between the old payment amount and the new) This will tell you approximately the number of months it’s going to take breaking even.

I say approximately because it doesn’t factor in taxes or changes in term-length. As long as you’re keeping the same term-length (term-length is the number of years) or going shorter, the approximation works. (If you’re going longer, say from a 15-year to a 30-year mortgage you’ll probably never break even.)

Once you know how long it’s going to take you to break-even recouping your mortgage settlement fees you can answer the question “Should I Refinance.” If you’re comfortable with the amount of time it’s going to take breaking even then mortgage refinancing probably makes sense. Remember, the better you shop for fees and the less you pay for things like loan origination the faster you’ll reach your break-even point.

Click Here For More Details…

You can learn more about paying less for current mortgage rates by avoiding lender junk fees and markup 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 help you make an informed decision answering the question “Should I Refinance.”

How To Compare Current Mortgage Rates & Get The Best Deal

If you’re looking for current mortgage rates on the web, it can be pretty confusing out there. How much benefit you’ll get from refinancing with today’s mortgage rates depends on how you go about shopping for your next home loan. Here are several tips to help you avoid common mistakes that steal the benefit you get from refinancing with the lowest current mortgage rates.

Current Mortgage Rates Can Be Deceiving

The rates you see published on the web and advertised on television can be deceptive because they’re not telling the whole story about the fees involved unless you can speed read the fine print. Lenders advertise teaser rates to suck homeowners into overpriced home loans.

“Wait…” you might be thinking, if current mortgage rates are so low how can the mortgage be overpriced? Mortgage lenders are in the business to make money and they don’t do it by just sitting back and collecting the interest on your home loan payments. If you want the best deal on your next home loan and the most benefit from current mortgage rates it helps to understand how lenders profit.

Mortgage Lender Fees Make or Break Your Deal

If you’re shopping for current mortgage rates to refinance you should also be focusing on the fees found on your Good Faith Estimate. The most common way that lenders manipulate current mortgage rates that results in overpaying is with discount points.

Did you pay a point or two when you first purchased your home? Depending on what was going on in the market at the time when you bought your home this could have been a waste of money. Should you pay discount points with today’s current mortgage rates? For most homeowners the answer is absolutely not.

You see, discount points are just a fee left over from the 1980s when homeowners were paying double-digit mortgage refinance rates. Back then it made sense to pay this fee to buy down your interest rate because the savings allowed you to recoup your out-of-pocket expenses in a fairly short amount of time.

The problem with current mortgage rates being at historically low levels is there’s nothing quick about the way you recoup the expense, if at all. Also, the benefit you’re getting by lowering your interest rate is proportionally lower, meaning you’re getting much less bang for your buck.

The problem is that paying discount points offers next to no benefit for anyone but mortgage lenders. This fee is pure profit for lenders which is why they quote current mortgage rates that include discount points first.

If you’re curious about how paying discount points affects your payment there is a chart on page 3 of the new Good Faith Estimate; however, as a starting point you should always request zero discount points when comparison shopping current mortgage rates.

How to Shop Smartly Using The Good Faith Estimate

Before you do anything else you can save yourself a lot of financial frustration by staying on top of your credit reports. If you haven’t already been to AnnualCreditReport.com for free credit reports you should go there before doing anything else. AnnualCreditReport.com is a government mandated website where the three credit bureaus (Equifax, Experian & Trans Union) are required to give you free access to your credit reports.

If you want to see your credit score there is a fee; however, CreditKarma.com seems to be an excellent alternative to those “free credit score” websites that charge you for credit monitoring services. (CreditKarma has clever TV commercials too)

Once you’re confident that your credit reports are accurate you can give your credit score a quick boost by paying down the balances on your cards below 30% of your limit. CreditKarma.com also offers free advice and community support on improving your credit profile.

Understanding The New Good Faith Estimate

The government recently overhauled the Good Faith Estimate (GFE) and the new version is vastly superior to the old GFE when it comes to shopping for current mortgage rates. Most of the fees you’ll want to pay attention to can be found on page two of your Good Faith Estimate starting with the loan origination fee.

Many mortgage brokers will tell you that one percent is the standard amount to pay the person or company arranging your home loan; however, I have reviewed community and military credit unions that charge as $400 flat for the mortgage origination fee. Remember, the less you pay obtaining your next home loan the more benefit you’ll get from current mortgage rates.

The next item on your Good Faith Estimate (item two in box A) is mortgage yield spread premium. Every now and then when I write about yield spread premium I get a snarky comment from someone saying that yield spread premium is illegal now and that I should do my homework. Fact of the matter is that yield spread premium is NOT illegal. The only thing that changed is that mortgage brokers cannot charge you a loan origination fee AND take yield spread premium from the lender. (The days of double-dipping mortgage broker commissions are gone for good.)

Yield spread premium is alive and well. Are your eyes glazing over as you think yield spread what?! It’s just a fancy name for a pretty simple concept. Mortgage lenders pay a premium for borrowers that accept interest rates higher than the current mortgage rates. This premium is a credit known as yield spread premium. You can use the premium to pay your loan origination fee and other closing costs. Just how much do you get for taking higher than current mortgage rates?

Yield spread premium works like discount points in reverse. For every .25 percent increase you agree to above current mortgage rates you get a credit of one percent of your loan amount towards your closing costs. This is the “credit or charge for the interest rate of x%. This REDUCES your settlement charges” that you see in box 2a of the new Good Faith Estimate. Again, yield spread premium is alive and well, just read your Good Faith Estimate.

Should You Agree to No Fee Refinancing?

Yield Spread Premium is how lenders like Bank of America offer no fee or no cash out of pocket mortgage refinancing. What are you giving up by agreeing to higher than current mortgage rates? Your payments will be higher for the entire time that you keep the home loan meaning you’ll eventually be overpaying significantly for having your closing costs paid by the lender. If you’re short on cash and having the lender pay your closing costs is your only option go for it; however, for most people it’s better to pay the loan origination fee and other settlement charges yourself.

How Long Before Breaking Even?

Some financial advisors like the Mortgage Professor claim it’s a mistake to look at how long it’s going to take you to break even when weighing your refinancing options; however, I disagree with their arguments. While it’s true that dividing your total mortgage fees by the amount you’ll be saving each month only approximates your break-even point because it doesn’t factor in things like term length and taxes, it’s still good enough an approximation for most people to make an educated decision.

You can figure this out for yourself by using a simple mortgage calculator to determine your new payment amount and then divide your out-of-pocket expenses by the amount your mortgage payment is going down.

Simple Mortgage Calculator

Loan Amount: Years: Mortgage Rate:

Annual Taxes: Annual Insurance:

Monthly Payment =

This tells you the number of months it’s going to take to break even recouping your closing costs and if you’re comfortable with this amount of time them refinancing with current mortgage rates on the offer you’re considering probably makes sense.

Click Here For More Details…

You can learn more about getting the most benefit from today’s current mortgage rates by avoiding unnecessary lender fees by checking out my free Underground Mortgage Videos.

httpv://www.youtube.com/watch?v=be9md0A0_2c
  • Get My Underground Mortgage Videos
Here’s a quick sample to help you avoid paying lender junk fees by shopping smartly…

Don’t Get Duped Into Paying Unnecessary Mortgage Fees

Most people, probably all of your neighbors, approach shopping for a home loan by focusing on getting the lowest mortgage rates. The problem is that the fees you pay make or break the deal you’re getting and choosing a lender based on mortgage rates or APR results in overpaying every time. Here are several tips to help you avoid getting duped into overpaying the mortgage fees that your neighbors paid.

Shop Mortgage Rates & Closing Costs

The origination fee and discount points you pay are the largest part of the settlement fees you control at closing. There are junk fees that find their way into your Good Faith Estimate (GFE) like processing fees and rate lock fees that you’ll want to keep an eye out for, but the most bang for your buck comes from page 2 of the Good Faith Estimate.

Take a look at Box A items 1 and 2 on the Good Faith Estimate and you’ll find the origination fee and any discount points. Spend any amount of time shopping for mortgage or refinance rates and you’ll find that lenders quote their lowest interest rates that include discount points first.

Should You Pay Discount Points?

If you’re not familiar with how discount points work don’t sweat that part of your GFE. This fee is the third item found in box two under part A on page two. Basically you pay one percent of your home loan to lower your mortgage rates by .25%.

There is a tradeoff table on page three that shows you how lowering your settlement charges affects your mortgage rates and payment amount. The more you pay at closing in discount points, the lower your monthly payments will be. If you want to change the options quoted in the tradeoff table you’ll have to request a new Good Faith Estimate from your loan officer.

Should you pay discount points? Mortgage rates are still near historical lows even though they’ve been inching up. In most cases agreeing to pay for lower mortgage rates simply raises your out-of-pocket costs unnecessarily.

The best starting point your mortgage rate shopping is to request zero point Good Faith Estimates and pay close attention to the fees found on page two.

Your Origination Fee & Yield Spread Premium

The origination fee you pay goes to the person or company arranging your home loan. It is often split between the loan officer and the lender. Negotiating loan origination fees is difficult but not impossible. Big name lenders like Bank of America or Wells Fargo don’t always have the best deals when it comes to mortgage fees like loan origination.

I’ve reviewed small, community based credit unions offering loan origination fees as low as $400. Invest some time shopping your local lenders and you can find deals like this.

What the heck is Yield Spread Premium? This is a credit generated by accepting higher than market mortgage rates. Every now and then I get a snotty comment saying “Yield Spread Premium is illegal now, you need to do your homework!”

This is simply not true. The credit or charge for your interest rate described on page 2 of the GFE is Yield Spread Premium.

This credit is how those no-fee refinance offers you see advertised work. By accepting higher than market mortgage rates you’re generating a credit from the lender used to pay your origination fee and other closing costs. Is taking higher mortgage rates to pay your closing costs worthwhile?

If you’re strapped for cash no fee mortgage loans can close the deal but you’ll always have a higher payment than if you had paid the settlement charges yourself.

How to Pay Less Closing on Your Next Home Loan

The most important aspect of shopping for your next home loan is to start by picking a program and stick with it. Do you need an FHA home loan with a 30-year fixed mortgage rate? Make sure all of your quotes are for this program and don’t let a broker confuse you by quoting a 5/1 ARM in the mix.

Limiting your quotes to identical programs is the only way to make an apples-to-apples comparison from different lenders. Invest your time comparing mortgage rates AND the fees I’ve discussed here will get you a better deal than 90% of your neighbors.

Click Here For More Details…

You can learn more about paying less for your next home loan from today’s best mortgage lenders by checking out my free Underground Mortgage Videos.

httpv://www.youtube.com/watch?v=be9md0A0_2c
  • Get My Underground Mortgage Videos
Here’s a quick sample to help you pay less at closing with today’s best mortgage lenders…

Smarter Home Loan Interest Rate Comparison Shopping

Comparing mortgage rates is easier today thanks to the standardized Good Faith Estimate courtesy of the Department of Housing and Urban Development. The new Good Faith Estimate outlines your closing costs simply making it easier to shop from today’s best mortgage lenders. Here’s how to use the new disclosure form to make the best home loan interest rate comparison.

Get a Better Home Loan Interest Rate Comparison

Finding the best mortgage rates with the lowest out-of-pocket fees can be confusing. Do you know the difference between processing fees and document fees? Do you know how Yield Spread Premium (yes it still exists) affects your loan origination fee?

The most common mortgage mistake your neighbors make with their home loan interest rate comparison is looking at rates and fees across different programs. The first thing you should do when shopping for a home loan is understand and choose a program. Once you’ve decide which program is best for you stick with it and don’t let a fast talking loan officer talk you into changing.

Understanding Your Good Faith Estimate

The problem in the past was that lenders cooked up different names for their fees to make home loan interest rate comparison shopping confusing. One would call it a processing fee the other an application fee. The new Good Faith Estimate standardizes lender fees and terms.

Your mortgage loan program and any “gotcha” fees like the prepayment penalty are clearly disclosed.

According to the government the new Good Faith Estimate saves you $700 just by eliminating the shady names lenders used to confuse homeowners.

Here are 4 steps to follow for the best home loan interest rate comparison shopping:

  1. Shop Smartly For Interest Rates & Fees

  2. It’s impossible to make an apples-to-apples comparison of interest rates and fees on your Good Faith Estimate if you’re comparing home loans across different programs. Once you’ve decided that a conventional 30-year fixed rate mortgage is right for you don’t let a shady loan officer confuse you by quoting rates and fees from a 7/1 ARM. If you confuse the issue by comparing across different programs you’ll overpay at closing every time.

  3. Shop With Accurate Mortgage Rate Quotes

  4. Many homeowners refuse to give their social security number when shopping because they’re afraid the quote will damage their credit. While it’s true that your credit score will take a hit by having a mortgage lender run your credit you can manage the impact by limiting inquires to a two week period.

    If you do this you’ll only get dinged once. Also, when requesting mortgage quotes during this two week period always provide your social security number to ensure you’re getting an accurate quote. If you don’t provide your SSN the best you can hope for is that lender’s advertised rate or worse yet someone’s guess.

  5. Use Your GFE’s Shopping Chart

  6. Page three of your Good Faith Estimate has a chart you can fill out to make a home loan interest rate comparison across different lenders. Once you fill out the chart at the bottom of page three you can compare loan characteristics and fees from up to four lenders. Be careful when using the shopping chart as some of the questions might tempt you to compare home loans across different programs which is a mistake.

  7. Avoid Focusing Only On Mortgage Rates

  8. Many homeowners get so caught up on chasing the lowest mortgage rates that they overlook fees. The fees you pay at closing make or break the deal you’re getting. If you focus only on mortgage rates at the expense of discount points and the loan origination fee you’re guaranteed to lose money.

    The fees you need to focus on are found on page two of your Good Faith Estimate. The loan origination fee and any Yield Spread Premium are found in section A box 1 and 2. Did someone mistakenly tell you Yield Spread Premium is illegal now? Look at box 2: “The credit or charge for the interest rate of X% is included in our origination charge. (See item 1 above.)”

    This is Yield Spread Premium and it’s perfectly legal. If you’re getting a credit towards your loan origination fee you might think that it’s less cash coming out of your pocket; however, you’re accepting a higher mortgage rate for the credit which means a higher payment.

    The loan origination fee in box 1 is important and can save you a significant amount at closing. Many brokers will tell you that one percent is standard but I’ve reviewed community credit unions that charge as little as $400 for loan origination. The less you pay the better the deal you’re getting on your next home loan.

Shopping smartly is the best strategy and using the new Good Faith Estimate’s home loan interest rate comparison table to compare fees can save you thousands of dollars at closing.

Click Here For More Details…

You can learn more about getting the best deal from today’s best mortgage lenders by checking out my free Underground Mortgage Videos.

httpv://www.youtube.com/watch?v=be9md0A0_2c
  • Get My Underground Mortgage Videos
Here’s a quick sample to help you find the best mortgage rates with the lowest fees…