| Shopping for the Right Home Loan | | | | your home loan. |
| Are you thinking about refinancing your home loan? | | | | In addition to the lack of regulation, banks are in |
| Are you looking for the best refinance rates available? | | | | business just to loan money. They make a majority of |
| If so, than there are several things you should know | | | | their profit by selling their mortgage loans on the |
| about the rate quotes you may be finding. A home | | | | secondary market. Loans with a higher market interest |
| loan refinance can quickly lower your monthly | | | | rate make a larger profit for a bank (known as the |
| payment, allowing you to keep more spending money | | | | Service Release Premium) which is why you will never |
| for yourself; however there are numerous "junk fees" | | | | get a wholesale refinance rate from your bank. |
| and markups that can cloud that great deal you may | | | | How to Get Wholesale Refinancing Mortgage Rates |
| have found. Below are several great tips to help you | | | | Obtaining a mortgage loan at a wholesale rate is not |
| find a great mortgage rate without overpaying! | | | | as hard as you may think. You do not need to have |
| Best Home Mortgage Rates | | | | special intel or a secret agent, you simply need to shop |
| Where are the best home mortgage rates? Numerous | | | | for the right mortgage broker! The fact of the matter |
| homeowners are unable to know a good mortgage | | | | is, if you want the lowest possible refinance rate, you |
| rate when they find one because they are unaware | | | | will need to find a mortgage broker willing to do your |
| of hidden markup and fees. What is a hidden markup? | | | | loan for a flat, up-front fee who will not mark up your |
| It is a way for loan originators, banks and lending | | | | interest rate for a fee (called Yield Spread Premium). |
| institutions to make additional money off of your loan | | | | Do you recall how banks profit from selling their home |
| refinance. Essentially, your interest rate is quoted higher | | | | loans to investors for a fee known as Service |
| than the bottom line, thus raising your interest rate and | | | | Release Premium? Well, mortgage brokers are able to |
| allowing your loan originator to make additional money | | | | collect a similar fee known as Yield Spread Premium. |
| off of your dollar! How do you bypass this hidden | | | | Yield Spread Premium is a fee paid to a mortgage |
| expense? You must find someone who is willing and | | | | broker by the mortgage lender for selling a higher |
| able to provide you with a mortgage without marking | | | | interest rate to a borrower. Although it must be |
| up your rate. In other words, you need access to | | | | disclosed to you, it is often explained away as a fee |
| wholesale mortgage rates. Refinancing (or even | | | | that the lender pays the broker and has nothing to do |
| purchasing for that matter) with the right originator can | | | | with the borrower's expense. It would be great if that |
| save you thousands of dollars in the end. How do you | | | | were true, but unfortunately it is 100% at the |
| find the right originator? Let's first discuss how to find | | | | borrower's expense, and that expense lasts over the |
| the WRONG one! | | | | life of the loan! It is the increased interest rate that |
| Bank Mortgage Loans | | | | results in an increased mortgage payment that comes |
| Countless Americans think refinancing through a bank | | | | directly out of the pocket of the borrower. The most |
| is a great deal because they cut out the middle man, | | | | important thing to know about this fee is that although |
| thus allowing you the lowest rate, however, there are | | | | you may be saving out of pocket expenses during the |
| several issues with bank originated home loans. | | | | origination of the loan, in the long run you are better off |
| Mortgage brokers and lenders are regulated by your | | | | to just pay the mortgage broker an upfront fee for |
| State's consumer protection and predatory lending | | | | originating your loan and getting the lowest possible |
| laws as well as the Real Estate Settlement | | | | interest rate. An honest mortgage broker should be |
| Procedures Act, thus being required to disclose (nearly | | | | able to provide you with both options and tell you the |
| to the penny) all fees associated with your mortgage | | | | true difference in your mortgage payment with and |
| loan. Banks, however, are regulated by the Federal | | | | without your Yield Spread Premium. If that is disclosed |
| Government and are exempt from your State's | | | | and discussed upfront, than there is no hidden fee |
| mortgage lending regulations. Although they must abide | | | | because your mortgage broker has revealed it to you! |
| by the Federal Truth-in-Lending laws there are many | | | | If you want wholesale mortgage rates for your next |
| loopholes that the banks are able to get around. | | | | home loan, make sure you tell your potential brokers |
| Additionally, bank have lobbied the Federal | | | | that you understand Yield Spread Premium and you |
| Government so they only need to provide a | | | | are not interested in a loan that includes a markup. |
| less-than-accurate Good Faith Estimate and an Annual | | | | Offer to pay them a reasonable loan origination fee |
| Percentage Rate based on this estimate. Due to the | | | | and you will be on your way to saving money on your |
| loopholes previously mentioned, banks are not required | | | | next home loan! |
| to disclose any of their markup or profit margin on | | | | |