Home Mortgage Refinancing Rates What You Need to Know

by: Louie Latour
Are you thinking about refinancing your mortgage loan this year? A home mortgage refinance can save you a lot of cash if you it the right way. Did you know the mortgage rate you have on your home now was marked up by the broker arranging your mortgage for a fee? You've been overpaying ever since purchasing your home just to give that person a fee from the lender. Never fear; you're not alone in fact, according to the HUD Secretary 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 home loan? Read on I've got the skinnyon refinancing your mortgage loan for you without paying too much for your next home loan. Home Loan Refinance Tips You don t have to be a personal finance guru to gain a good deal on your next mortgage. Mortgage loans are retail things like anything else you purchase today; you just need to understand how to distinguish and stave off the crap people are shoveling to make a buck at your expense. Mortgage brokers have garnered themselves a repute for being shady used car salesman in past years and correctly so. This doesn t mean you should stave off employing a mortgage broker when refinancing your home. Mortgage brokers have access to par interest rates which is something you'll ne'er get from your bank or credit union. Wholesale Mortgage Rates You're educated with wholesale monetary values when it comes to retail products but what about mortgage loans? Mortgage interest rates are no different; in fact, mortgage loans are retail products being resold by mortgage companies and brokers for a fee. How do mortgage companies and agents make their cash? They make money from two places: you and your lender. Your mortgage company or agent can charge you an origination fee, often called origination points for their part in setting up your home loan. This fee is often fleeced. A reasonable fee for loan origination is one percent of your loan amount however, it s not uncommon to see this fee as high as . Ne'er give this much for a mortgage broker origination fee. The next source of compensation for your Mortgage Company or broker is a little noted kickback known as Yield Spread Premium. Simply put this is a kick-back given by the lender when your mortgage broker locks and closes your home loan with a higher than market place mortgage rate. You ll see market or the so called wholesale interest rates referred to as Par Mortgage Rates. Par Mortgage A par interest rate is plainly one that does not cost you anything to catch or produce any money for the Mortgage Company or agent arranging your home loan. Interest rates that cost you cash require discount points be given at closing. Keep in mind that one point is one percent of your home loan sum of money and a discount point is a fee paid to lower your mortgage rate. If you have to commit a fee at closing to get certain mortgage interest rate this is not a par rate; likewise if your interest rate produces a commission for the agent it is not a wholesale rate either. If you desire the greatest possible deal when re-mortgaging your home loan you need to get as near to a par mortgage rate as attainable. Fending Off the uncalled-for markup of your mortgage rate to generate a fee for the mortgage agent is simpler than you think. You just need to seek out the appropriate broker for the task and forget about refinancing with a bank or credit union. Banks fund their mortgages with the bank's funds and are not commanded under the present-day disclosure laws to state you how they've marked up your interest rate. Equate a wholesale rate to your bank's great deal and you'll see how much they overcharge their clients.