Most homeowners don’t know that the interest rate quotes they get when refinancing are all “retail” interest rates. The mortgage rate your broker quotes you includes markup for their commission; homeowners who learn to recognize this markup can refinance with a wholesale mortgage rate. Here are several tips to help you refinance with the perfect mortgage loan.
Mortgage loans are retail products like any other purchase you make. What makes your mortgage “Retail” is the markup your loan originator adds to get a bonus from the wholesale mortgage lender. When you apply to refinance your mortgage the wholesale lender approves your loan for a specific interest rate. This mortgage rate is set by the lender based on a number of factors including your credit and financial details.
The wholesale lender provides this mortgage rate to your broker. Many brokers pretend they don’t know the wholesale rate you were approved and try and explain away their markup as “lender paid compensation. ” While it’s true the lender is paying this compensation, the reason it’s being paid is to reward your mortgage broker for overcharging you.
You’re already paying origination fees for the mortgage broker’s services; any amount of Yield Spread Premium you agree to pay means you are stuck paying above market mortgage rates. Fortunately homeowners who learn to recognize Yield Spread Premium can avoid paying this unnecessary markup. When comparison shopping for loan offers you can negotiate with potential brokers for a wholesale interest rate.
You can learn more about refinancing your mortgage with wholesale interest rates with a free mortgage toolkit.
To get your FREE Mortgage Refinancing Video Toolkit, visit using the link below.
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 .
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