Monday, December 19, 2011

How to Get a Lower Interest Rate Refinancing Home Loan

It could be easy to find a low interest rate home refinancing loan. There are practical and logical ways to do so.

Mortgage Refinancing

Refinancing an existing mortgage is a timely option for many distressed home loan borrowers these days. If in the past, most borrowers simply accept facing foreclosure and losing their homes if they fail to repay the debt amount. Now, such borrowers could still do something to avoid the unlikely occurrence. Through a low interest rate home refinancing loan, any borrower could take a fair chance of getting enough and necessary leverage for financial recovery.

The recent recession has truly made life harder for many people, at least financially. Its impact is still very much felt. Experts warn that it may take some time before affected people overcome the financial burden brought about by the event. This is most especially true for consumers who have lost businesses and jobs, incurred poor credit scores, and defaulted on mortgages that lead to pending foreclosures of their properties.

Loans With Competitive Rates

It is logical that when borrowers apply for any home loan refinance product, they initially look at the refinancing interest rate. This is because the rate would greatly have an influence on how they could maintain and keep the loan. As usual, higher rates would be much more of a burden because they would lead to higher loan costs in the long run.

If you are considering applying for one, you should aim to find and secure a low interest rate home refinancing loan. Do not worry because it is now more possible for anyone to do so. You could do it easily and effectively even if you have a bad credit status, which usually lead to more expensive loan rates.

Comparison Shop And Loan Application

To be able to find the best rate, it is appropriate to run a practical comparison shop. By doing this, you could easily compare the existing rates of different home loan refinance providers. Thus, it would be much easier to spot the specific loan products that are more advantageous to you. To do a thorough and more effective comparison shop, it would be best if you would get quotes from at least five different loan providers.

Look at every quotation you get. This is an imperative part of the comparison shop. Next, look at differences in terms and conditions. Make sure, you compare products with the same maturity, term, or duration. Usually, short-term loans take higher rates compared to longer-term ones.

Choose the provider with the lowest rate. This is logical because you should aim for a product that is least costly on your part.



By: Julian Lim
Are you wondering how you could secure a low Refinance Mortgage Loan Home Rate? Check out the link Bad Credit Home Refinance to find insights. http://www.bad-credit-home-mortgage-loan-refinance.com/

Thursday, December 1, 2011

Home Refinancing - How to Refinance Your Mortgage to Prevent Foreclosure

Hundreds of thousands of families have received the dreaded notice of foreclosure proceedings. Many families assume that a foreclosure notice means the writing is on the wall.


They may not know that you can refinance your mortgage and prevent foreclosure more often than not. There are some steps you will need to take, difficult steps, but it can be done. And it will be worth it.


1. Don't avoid talking to your lender. Pull out your mortgage statements. Find contact number for your lender. Call them right away. Ask them these questions: What is the total cash amount I need to send you to resolve my account?

Write that number down. Is there any way I could refinance this mortgage to terms I could afford in my new situation? What cash would I need to bring to the table to refinance? Can I extend the terms of my mortgage to lower the payment? (This makes them more money over the long haul, and saves your credit.)



2. Raise cash to refinance - if your lender is willing to work with you to refinance your mortgage to prevent foreclosure then you will likely need cash. Only if your credit is excellent, and your financial future now secure, will you be able to wrap all the expenses into the mortgage in this lending climate.

Don't rule out any means of building cash to help you refinance your mortgage to prevent foreclosure. Get a part time job for the short term. Cut out the internet and the cable if that will help. Get personal loans using legal promissory notes from family members if they mention they are willing to help. Don't even be afraid to send out a letter asking for support or help. You will be surprised what help you might receive if you are a trustworthy and loving person.



3. Talk with other banks about a refinancing mortgage. You do not have to go with your current lender to refinance your mortgage to prevent foreclosure. They are the best place to start since many lenders will be flexible with current customers to keep them on the books, especially if they realize you have other lending options.

Your mortgage makes them money the longer they keep it and you pay it. But it cannot hurt you to check with other lenders on the costs to refinance your mortgage and prevent foreclosure. If you can refinance cheaper and prevent foreclosure easier why wouldn't you? Ask them for their APR (annual percentage rate) that you could likely receive with your credit and cash. Then compare their APR with your current lender's APR offer. The APR wraps in points, closing costs, etc. and gives you an apples to apples comparison that a flat lender rate (the lower rate that is often quoted) cannot give you.



The biggest determinant of whether or not you will be successful in your attempt to refinance your mortgage to prevent foreclosure is determination. Determination will lead you to make the calls, ask the tough questions, persevere in contacting the right people, ask for help when you need it, and work the plan you create to make your refinance happen to prevent foreclosure.


Don't give in! Keep pushing and you will find a way to refinance your mortgage and prevent foreclosure. You can keep your home, and keep your dignity if you are determined.




By: Dave Ward
Dave Ward is a real estate investor, professor, and freelance writer. Remember that a When to Refinance Rule of Thumb can help you avoid foreclosure in the first place years before it happens. Follow this link to find out how to make foreclosure refinancing happen.

Saturday, November 19, 2011

Refinancing Your Auto Loan After Bankruptcy - 5 Auto Refinance Tips

Declaring bankruptcy was probably never something you had ever thought you would have to go through when you first become an adult. And yet, here you are. While it can feel like the end of your financial life, it doesn't have to be.

You just need to learn how to live under a new set of financial rules that do not apply to people who have never filed for bankruptcy themselves.

Some of the common difficulties that come with personal bankruptcy include the inability to qualify for new credit cards and difficulties getting approved for new loans.

Being in this situation is a real shame, since someone who has gone through bankruptcy needs now more than ever to cut down on their monthly expenses. They no longer have a cushion of credit to rely on for getting through hard times.

One type of loan that is harder to get when you are post-bankruptcy is an auto refinancing loan. If you can find a way to get approved, this type of loan can potentially help you cut down on your monthly expenses by helping you to secure a lower interest rate than you have now.

You can have a financial life after bankruptcy: auto refinance included. If you have a bankruptcy under your belt but believe that auto refinancing well help you cut down on your monthly expenses, here are 5 auto refinance tips to help you qualify for the new loan you need:

1. Do some financial housekeeping:

Start your housekeeping by taking stock of the following essential bits of information:

* your current credit score

* your credit history in relationship to making car payments

* the current outstanding balance on your car loan


2. Find out your car's current resale value:

Do a bit of research to determine how much your car is worth today. Kelley Blue Book is a great place to start. Next, compare the value of your car to the amount you owe on your current auto loan. You will have a much better chance of qualifying for an auto refinancing loan if your car's value still exceeds that of your outstanding principal loan balance.


3. Look up your current interest rate:

Now, find out your current loan interest rate by either calling your current lender or by checking your original loan agreement. This will be the number to beat as you start applying for car refinancing loans.


4. Build a list of at least 4-5 bad credit auto refinancing lenders:

Use online research or talk to friends and family to come up with a list of 4-5 bad credit auto refinancing lenders. The more lenders on your list, the better your chances will be of getting approved at a low refinance rate.


5. Go through the steps of applying to all of them:

As you apply to each of the lenders on your list, be ready to explain the circumstances of your bankruptcy. Remember, these lenders are already conditioned to working with people in your situation. Still, every borrower's credit history is unique. Also, be ready to explain your credit history as it relates to making car payments in the past.

Follow these 5 tips after bankruptcy and auto refinance loans will be much easier for you to get.



By: Robbie T. James
Get a list of bad credit auto loan lenders near you at: Car Financing with Poor Credit. http://www.squidoo.com/car-financing-with-very-poor-credit

Friday, October 28, 2011

Short Refinancing - Frequently Asked Questions

What is a Short Refinance?

A short refinance is when a lender accepts less than what is owed on the mortgage to allow the home owner to refinance.

Will A Short Refinance Damage My Credit?

It depends; unfortunately this question has both a Yes and No answer. The short refinance could show up on your credit as Settled For Less Than Full and may drop your scores 50 -70 points. But in actuality most lenders will report as "Mortgage Paid" after a short refinance, which will actually increase your scores as it has no negative impact, but it all depends on your lender.

Can I get Get Cash Out From The Refinance?

No, since the lender is taking a loss as they reduce the amount you owe them, they will not allow the homeowner to get any money at closing.

Will I have to Pay Back The Difference?

Most lenders will normally release the home owner of the full balance in writing. Especially if they know you don't have any significant assets. And typically the IRS will require that you pay taxes on the forgiven amount but in 2007, they no longer consider the forgiven debt as taxable income on primary residences. Please consult with your tax advisor for more details on The Mortgage Relief Debt Act.

How Long Will The Process Take?

It depends on your specific lender, but normally you are looking on about 30 - 45 days. The key is to make sure you give the lender everything they need in a timely fashion and continuous follow up with your lender on a daily basis.

What Will I Need To Qualify?

Once you lenders give you the go ahead to start the Short Refinance procedure, then it's just a matter of getting qualified for an FHA Loan. FHA has some of the lowest fixed rates available in today's market as well as the the highest loan to values which is preferred by most lenders that are participating in short refinances.

How Much Will This Cost Me?

It depends on the loss mitigation professional that you are working with, but most normally charge about 1% of the new loan amount which is paid at closing and normally the only upfront fee is for the FHA appraisal.

Why Would A Lender Participate In A Short Refinance?

Lenders only care about two things, which is how much you owe them and how much the house is currently worth. The reason they will consider to do a short refinance is because they will get more money out of a short refinance when compared to a short sale and a significant amount more than if the house was suppose to go into foreclosure.

The short refinance is based on the market value of the property, while the short sale is based on the best offer and no one in this market is going to pay market value for a home today. Also the average foreclosure will cost a lender about $100,000.



By: Marlon Baugh
Marlon Baugh is a nationally-known mortgage expert. Since 2003, he has specialized in Florida FHA Mortgage Loans for people with Bankruptcies, Foreclosure or with other credit issues, as well as Florida Loss Mitigation. If you would like a Free Copy or to get instant access to the remainder of this Insider Mortgage Report, please visit http://specializedfinancialsolutions.com/lendersexposed.htm or Call 954-678-5796

Thursday, May 12, 2011

Refinance Your Car - How To Be Successful With Refinancing

Things have become so difficult these days that few people are really able to dig deep into their pockets and get a brand spanking 'new' of anything. The present trend is refinancing and so if you are looking to car refinancing , then you are in the right place. This article will outline a few important considerations that you must make before you start the process. Read on to see what the top tips are for getting the most out of a car refinancing package.

Understand Your Credit Standing
The first thing you should do is take stock of your credit standing. This will help you to gauge how much to actually borrow as well as give you sense of your chances of success. If you haven't had any credit problems in the past, this doesn't mean that you are in the clear. This is because no matter how good your credit rating, there will always be some limit to what lenders will provide.

Consider Your Budget
When you refinance your car, particularly if you manage to get one of those 0% for 9 months deal, you will inevitably have to start paying once that initial grace period is over. It is very important therefore that you take stock of your finances and then work out how much you'll be able to borrow. Bear in mind too that when you refinance, you effectively take car of one debt and take on another.

Go Online For The Best APR Deals
This last consideration is crucial. As I mentioned above, if you manage to get a good deal on a refinance package, there will be a standard APR that your loan will revert to once any grace period elapses. This means that your main task in securing refinancing should be to get the lowest rate possible. Depending on your credit, you should be able to get a rate that is close to the industry standard but you can shave this down further by searching online for a good lender.

Like I said at the beginning, refinancing is all the rage nowadays, so the time to take advantage of this is now. When you decide to go through and refinance your car, use an online provider to save big on cost. Anything else gained on top of cost-saving will be a nice bonus. Many online providers offer multiple quotes from several different lenders, so you can easily compare all your available options.

How to Get an Auto Loan Fast, Even With Bad Credit:
Believe it or not, you can get a fast auto loan REGARDLESS of your credit. Visit Best Bad Credit Car Loans to receive FREE quotes from the top 3 auto loan service providers. In fact, you could qualify for a car loan in as little as 24 hours, even if you've been turned down before. Best of all, the quotes are free and there is absolutely no obligation whatsoever.



By: Jennifer Murray
Best of luck! Visit www.BestBadCreditCarloans.org to get started.

Tuesday, April 26, 2011

Mobile Home Loan Refinancing

If you have purchased a mobile home, you may have done so with a mortgage loan, a chattel loan or simply a personal loan. In any case, if your monthly payments have become too much of a burden or if you just want to repay your loan sooner or improve the terms and conditions of your loan because your credit has improved, what you need is refinancing.

It is possible to refinance a mobile home loan, yet, it is not such an easy task when compared to home loan refinancing. There are several reasons for this but the main ones are undoubtedly the fact that mortgage home loans are a wider market than mobile home loans that are simply a small niche of the financial industry and also due to the fact that mobile homes are still vehicles with values that are reduced over time.

Mobile Home Loans: Mortgage, Chattel or Unsecured Personal Loan

When you purchased your mobile home you may have done so with the aid of different financial products depending on the terms of the purchase. For instance if you purchased the mobile home plus the land in certain states you can obtain a mortgage loan and secure the debt with both the mobile home and the land, if the land is not included and only the mobile home secures the loan, then you are applying for a chattel loan and if there is absolutely no collateral then the money is obtained from an unsecured personal loan.

Refinancing each of these financial products is a different process and therefore has different costs. Some of these loan products are easier to refinance than the others and therefore you need to know these differences beforehand in order to understand which possibilities in terms of refinancing your mobile home debt you have. In any case, refinancing is possible but the costs may persuade you against the idea.

Issues with Mortgage And Chattel Loans

Unfortunately, refinancing a mortgage loan with your mobile home is not as easy like refinancing a mortgage loan with a regular property. The reason is simple, while most houses and condos maintain or increase their value over time and thus, equity builds due to that and due to the reduction of the debt secured by the property, mobile homes depreciate and thus, equity builds at a lower pace if it builds at all.

Chattel loans have exactly the same problem, the mobile home being used as collateral depreciates and the value of the property covers a lower portion of the loan each year even as the debt gets paid. Moreover, mortgage loans have an advantage over chattel loans because the land is included and the land usually does not depreciate thus maintaining an important part of the collateral's value.

Personal Unsecured Loans

Personal unsecured loans are much easier to refinance because even if your current lender does not want to provide you with a new repayment program, as long as your credit is fair and your income allows it, you can obtain another loan with your desired terms and use the money to cancel the previous loan in advance. You should beware however of prepayment penalty fees.

Moreover, if you can obtain a secured loan instead (using your mobile home and or the land as collateral), you will get more advantageous terms on your loan and you will be able to cancel the previous loan while getting additional funds for any other purpose.



By: Hilary Bowman
Hilary Bowman is the author of this article. She works successfully as a financial advisor with years of expertise on Unsecured Personal Loans. Hilary publishes informative articles about home loans, credit cards, auto loans, bad credit loans, business loans and others at http://www.fastguaranteedloans.com

Saturday, April 2, 2011

Refinancing Your House - The Pros and Cons

Refinancing your house basically allows you to pay off your current mortgage with a new mortgage plan and with a lower interest rate. When you want to reduce your monthly mortgage payments and enjoy lower interest rates or faster equity, refinancing your house may be the best option. This may actually be the best way out of your current financial plight.

Indeed, refinancing your house can help you save thousands of dollars over your mortgage's length. Your monthly mortgage payment can be lessened substantially, depending on your current interest rates. Even if you have a bad credit, lenders and financial institutions are still willing to provide you a way to refinance our house.

You don't need to apply to different lenders to get information on the lowest rates. Most online mortgage companies will provide you with quotes from various lenders to help you decide.

Refinancing your house will allow you to cut down the term of your mortgage without an increase in the amount of your monthly mortgage payments. However, refinancing also has both advantages and disadvantages which you must consider carefully before taking your course of action.

Knowing, understanding and analyzing these pros and cons will help you make the right choice and avoid future dilemmas that may arise out of an uninformed decision. Here are the pros and cons you should consider.

Pros:

1. Lower interest rates - probably the most important advantage of refinancing your house is getting rid of the higher rates and saving up as much as $150 a month from mortgage payments.

2. Term of payment can be extended.

3. Change your type of rate - refinancing can help you secure yourself from unexpected rate increases. You can choose to go to a fixed rate from a variable rate through mortgage refinancing.

4. Increase mortgage amount - with refinancing, this is now very possible. An increase in the amount of mortgage can help you settle other debts such as credit cards debts and personal loans. Of course, it still boils down to one thing - lower interest means more savings. Refinancing allows you to exchange one mortgage for another, pay off high interest credit card debts and enjoy a tax advantage all at the same time.

5. Lower monthly mortgage payments - refinancing your mortgage can allow you to ease your cash flow difficulties.

Cons:

1. Budget-dependent - since mortgage refinancing also means having more than your current mortgage, this also means that you would have to watch your budget more. Bear in mind that if you miss out on payments, you might lose your home.

2. Refinancing is cost-heavy - the total refinancing cost is composed of closing costs combined with private mortgage insurance premiums that you pay when you refinance your loan. Lost tax savings are also considered part of the refinancing cost.

3. You may have to pay more - If you are reckless in calculating your refinancing costs, you might end up paying more instead of saving more, especially in terms of interest charges. So make sure that you ask guidance from your lender to avoid this from happening.

4. Penalty involvement - There could be penalties that will be imposed on you if you fail to meet your obligations when you refinance your house. The best way to prevent this is carefully review the terms and conditions of your loan and follow it to the letter.

These are the important advantages and disadvantages of refinancing that you should consider. To help you find the best deals in house refinancing, you can turn to the internet to find the best home loan refinance services. It will be easier to compare refinancing deals through online services.

A quick search will reveal hundreds of lenders that you can compare. You can also read reviews of refinancing companies to help you make your choice easier. By taking the time to research, compare and analyze, you will be able to choose the right refinancing deal for your house. Just bear in mind all these advantages and disadvantages before you make your decision.

Just like any other mortgage loan, this could work against your favor. To avoid this, discuss your options with your preferred lender. You can also ask guidance and recommendations from your tax advisor.



By Nathalie Fiset
For more information on financing and loans, please visit:
http://www.safepaydayloans.com/online-only-payday-loans.html
http://www.safepaydayloans.com
http://www.drnathaliefiset.com

Thursday, March 17, 2011

What to Know When Refinancing Your Home Loan

Currently, in Australia there is no better time than right now to refinance your home loan because lenders are offering more competitive options to attract new customers. If your loan has not met your needs so far, then refinancing your home loan could turn your financial situation around.

Visit A Home Loan Specialist

Depending on when you received your loan and the terms of it, you may feel that your loan is unfavourable compared to the newer loans that are available. The property market is softening so, in order to stimulate the market, more competitive loans are being offered by various lenders.

Mortgage brokers and home loan specialists can give you all the advice you need to make an informed decision and also keep you udpated with the latest trends. They can essentially give your home loan a "check up" to make sure you are not paying too much, or missing out on new features that are being offered.

Be Cost Effective

If you do not use certain features in your home loan, then you may be wasting money by paying for them or not utilising them effectively. These features will increase the cost of your loan, including the interest rate.

Your current loan may not be your best option, so if you refinance your loan, you may be introduced to some more cost effective choices for your current situation. If a home loan specialist deems that your loan is healthy, then you do not need to bother refinancing your loan.

Why Refinancing Changes Your Finances

You would be surprised at just how much refinancing can change your current financial state. Even if just a small rate change occurs you may be looking at a real economic boost in your bank account.

Sometimes there are fees associated with refinancing and changing loans; if you can find a lender who does not charge these fees then you will be able to redeem your financial benefits faster than normal. Other financers who charge these fees usually offer lower rates while those who skip the upfront costs generally charge a higher interest rate.

Refinancing is all about picking and choosing. You have to go through loans with a fine tooth comb to ensure there are no hidden catches. You want to make sure that you are upgrading your current loan and not creating more financial burdens for yourself.



By Elizabethi Mcleana
ME Bank provides first-class banking services like online savings accounts, personal loans, home loans and term deposits for Australians with an industry super fund.

Sunday, February 27, 2011

Refinancing After Bankruptcy

Refinancing after a bankruptcy can seem like an especially difficult challenge, but it doesn't have to be. Six months after your bankruptcy has been finalized, you can find lenders willing to refinance your mortgage. In fact, refinancing mortgage can help rebuild your credit to good standing in two year's time. The following steps will help you find the best refinance lender while helping your rebuild your credit record.

Preparing For Refinancing

Right after bankruptcy, you have six months to prepare to refinance your mortgage. Begin by establishing good payment history by regularly paying your bills and current mortgage. This is also a good time to open a credit card account to start establishing good credit history.

If possible, also start building up a savings account. The more cash assets you have, the better your application will look. Consider having a garage sale or taking a second job to raise funds.

Researching Lenders

Once you are ready to refinance, research mortgage lenders and their rates. Online mortgage websites allow easy comparison shopping. Look at both interest rates and fees of refinancing quotes. Usually a slightly higher rate with low fees is the best deal.

With bankruptcy on your credit report, you will typically need to work with a sub prime lender. You can expect to pay a few percentage points above a traditional mortgage, which you can find through online mortgage companies.

Choosing Your Refinancing Package

You may be offered a chance to cash out part of your home's equity when refinancing your mortgage. If you need to make home improvements or buy a car, this may be a good option. However, if you keep your home's equity in place, you are improving your credit.

Once you have decided on your terms, you can finish your loan application online or through the mail. Quotes are not guaranteed, so rates may vary slightly once your application has been approved. Before the loan is finalized though you have the opportunity to review the loan again.

After Refinancing

With your refinancing completed, you can plan to lower your interest rates through refinancing in two years by building up your credit score. Continue to make regular payments and add to your cash reserves. Before you apply to refinance again, review your credit report to be sure your bankruptcy closed all past accounts on your record. With a solid credit history behind you, you can apply to traditional mortgage lenders.



By : Carrie Reeder
Carrie Reeder is the owner ABC Loan Guide, an informational website about various types of loans. http://www.abcloanguide.com/

Thursday, February 3, 2011

Zero Cost Mortgage Refinancing

People always want the best things in life and this is very difficult to get. The main problem is that finances are not available to get what you want. Everything in life costs some money and this seems to be the biggest hurdle.

Especially when it comes to the real estate field, people were in the most trouble and this has become worse in the past few years, since the economic crisis has struck our nation. People are opting for no closing cost mortgage refinancing, which has shown a little potential.

In the real estate business, when it comes to dealing with land, houses, properties, etc. money is the most important consideration and this allows people to buy any place they want or get anything they like. But the crisis has made it impossible for them to survive.

The mortgage refinance with negligible closing cost is very helpful in determining the best outcome for you, as it will help to refinance your first mortgage and help you take out the next one with ease. The rates that will be charged in this mortgage will be lower than the original ones and this will allow for savings in the future.

People can get all the hope for their savings and refinance with the new option of zero closing cost refinance. There are many companies who provide this option, but the fact of the matter is that in reality, there are costs being charged to you and you cannot go without them.

The costs are hidden or they are basically submerged into the overall loan amount so that you can't figure out what the reality is. The whole process is made just so that the people get attracted and they get the loans taken out.

The only reason that you will want to go ahead and get mortgage refinance with zero closing cost is that you are in deep financial trouble and that you need money to pay off your current mortgage and to stay put in the coming time.

The rates will be lowered and you will gain quite a lot on the overall deal. The best way for you is to have your finance calculated and figure out first that whether you really need to take out another mortgage loan or not, and once you have found out the answer to that question, you can go ahead and deal with the remaining issues.

The best possible way to get the best no closing cost refinancing is to go online and search for the most competitive people who can do the task for you. There are many companies that offer this scheme and they are very good too but you need to see their credibility, their years in the field and most of all, and the customer reviews they have gotten over the time.

All these things will then come up and help you in finding the most suitable lender for your second or even the third mortgage to finance your house and your needs.



By: Shyam Singh
To learn much more about the Mortgage Refinance, visit InsideMortgageRefinance.com where you'll find this and much more, including Zero Cost Mortgage Refinancing.

Sunday, January 16, 2011

Mortgage Refinancing Secrets Exposed

No one wants to get ripped off when it comes to any purchase, and your mortgage loan is no exception. The problem is that very few homeowners understand how mortgage loans work and wind up overpaying thousands of dollars. Here are several "industry secrets" to help you avoid paying too much when refinancing your home mortgage loan.

The Mortgage Industry Has a Dirty Little Secret

When it comes to ripping people off you can't get dirtier than Yield Spread Premium. If you've never heard of Yield Spread Premium don't worry, 90% of homeowners have no idea it exists. So what is Yield Spread Premium? Simply put this is a commission paid to the person arranging your loan for overcharging you.

It doesn't matter if that person is the mortgage company down the street from you, a broker, or that mega giant Internet web site; with the exception of bank originated mortgages all loans work the same.

Most mortgage companies and brokers charge you an origination fee for their part in arranging your loan. This origination fee, often called "origination points" could set you back as much as three to four percent of your loan amount. One percent is a reasonable amount to pay for loan origination; however most people pay too much for this fee.

Yield Spread Premium Exposed

How does Yield Spread Premium work? Here's an example to illustrate how Yield Spread Premium can drive up your mortgage payment by thousands of dollars every year. Suppose you're refinancing your home loan for $325,000.

Your mortgage broker quotes you an interest rate of 6.75% and charges you an origination fee of 2.5%. You'll be required to pay $8,125 to the mortgage broker for their part in arranging you loan. At this mortgage rate your monthly payment amount will be $2,110.

What Your Mortgage Broker Doesn't Want You To Know

The mortgage broker quoted you an interest rate of 6.75%. What your broker isn't telling you is that you actually qualified for a mortgage rate of 6.0% and they've marked it up to get a commission from the lender.

The lender pays your mortgage broker a bonus of 1.0% of your mortgage amount for every 0.25% you agree to overpay. In this example the broker receives an additional 3.0%, or $9,750 on top of the $8,125 that you're already paying them for loan origination. That's a whopping $17,875 for a few hours work!

So what if the lender pays your mortgage broker all that money, it's not coming out of your pocket right? Wrong! If you had gotten the mortgage rate that you qualified your monthly payment would only be $1,940 per month.

That's $2,040 you're paying every year unnecessarily. The good news for you is that Yield Spread Premium and other junk fees can be avoided. Invest a few hours doing your homework and you can save yourself thousands of dollars every year on your mortgage loan.



By: Louie Latour
Louie Latour specializes in showing homeowners how to avoid costly mortgage mistakes and predatory lenders. To get your hands on this Mortgage Refinancing Toolkit, which teaches strategies for finding the best mortgage and saving thousands of dollars in the process, visit Refiadvisor.com. Get your free mortgage refinancing tutorial today at: refiadvisor.com