| A well known author named Theodore Sturgeon once | | | | marks up the price of your TV, the mortgage |
| said "Ninety Percent of Everything is crap." This | | | | company or broker marks up your interest rate |
| became known as Sturgeon's law and is even quoted | | | | without telling you. This is in fact, how mortgage |
| in the Oxford dictionary. Sturgeon's law is alive and | | | | companies and brokers make the majority of their |
| well when it comes to the Internet and the mortgage | | | | profits. It's not commission; they make money from |
| advice you find online is no exception. Here are several | | | | retail markup. You're already paying origination points to |
| tips to help you separate the wheat from the chaff | | | | this company for the new loan, so why should you |
| when it comes to online mortgage advice. | | | | pay double? |
| I recently read an article online offering suggestions on | | | | Here's a summary of how it works. You qualify for an |
| how one could save money when refinancing. The | | | | interest rate based on your credit and the details of |
| article suggested that you should concentrate your | | | | your application. That interest rate is not set by the |
| efforts on finding a mortgage broker that worked on a | | | | mortgage company; it comes from the wholesale |
| non-commission basis. The author stated that | | | | lender. The mortgage company receives a written |
| non-commission loan representatives are less likely to | | | | guarantee of your rate from that wholesale lender. |
| overcharge you and have your best interest at heart | | | | Your mortgage company turns around and provides |
| when refinancing. While this sounds like good advice, | | | | you a separate written guarantee for a higher interest |
| it's actually complete rubbish. If a mortgage company | | | | rate. This markup by the mortgage company is called |
| or broker tells you they work on a non-commission | | | | Yield Spread Premium. Homeowners that learn to |
| basis, you are guaranteed to pay too much refinancing | | | | recognize Yield Spread Premium when refinancing |
| with that company. Calling someone a | | | | their mortgage loans can avoid paying it. |
| "Non-commission loan representative" is just a slick | | | | Can you see how the advice this author gave in their |
| marketing trick to gain your misplaced trust. | | | | article could result in overpaying for a new mortgage |
| Here's what that author doesn't understand about the | | | | loan? To learn more about mortgage refinancing while |
| mortgage industry. Mortgage loans are simply retail | | | | avoiding bad advice, costly mistakes, and Sturgeon's |
| products, just like televisions. Just as an electronic store | | | | law, register for a free mortgage guidebook. |