If you’re in the process of refinancing your home mortgage loan there are several things you need to know about the mortgage rate quotes you receive. Nearly all mortgage quotes have markup built into them to give the person arranging your loan a commission. If you want the lowest possible mortgage rate and payment amount you must avoid this commission based markup of your loan. Here are several tips to help you find the lowest possible refinance mortgage rates.
Should you use a mortgage broker to arrange your new home loan or refinance with your bank? First of all, banks are exempt from the Real Estate Settlement Procedures Act in the United States and you’ll never get Par refinance mortgage rates taking out a home loan from your bank. Second, mortgage brokers alone have access to par refinance mortgage rates but most will not give you this rate since they build their commission into your quote.
What are par refinance mortgage rates you ask? Simply put par mortgage rates do not require you to pay points to qualify and do not create a commission for the broker in the form of Yield Spread Premium.
This commission known as Yield Spread Premium is the number one reason people overpay for their home loans. Avoid this commission based markup and you’ll save thousands of dollars every year that you keep the loan.
Getting par refinance mortgage rates isn’t as difficult as you think; you don’t have to be a financial guru or be “connected” to find the right mortgage broker. Look for brokers that are self-employed and working out of their homes. These brokers do not employ expensive sales staff, work from posh office spaces or drive company hummer’s plastered with their company logo.
As a result they don’t have the overhead of these other mortgage brokers and are going to be far more likely to negotiate the deal you’re looking for. Remember you’re looking for par mortgage rates that you can only find from a self-employed mortgage broker.
There are a number of junk fees in addition to Yield Spread Premium that you need to beware of. The first is a mortgage rate lock fee. There are no mortgage lenders out there that charge a fee for locking in your mortgage rate. If your broker charges you a rate lock fee this is a sign you are dealing with a dishonest mortgage broker and should find someone else to arrange your loan. Other common junk fees include broker courier fees and loan processing fees.