Jul 19 2008
California Mortgage Refinance How to Avoid Overpaying for Your New Loan
If you are in the process of refinancing your California mortgage loan, there are a number of pitfalls that will cause you to overpay for your new loan. Finding the perfect California mortgage takes more than careful comparison shopping, you need to understand the industry and speak the lingo. Here are several tips the help you find the perfect California mortgage refinance loan without paying too much.
If youre not familiar with Yield Spread Premium, youre already paying too much for your mortgage loans. Home prices in California are bad enough without your mortgage representative taking advantage of you; however, thats exactly what happens.
The origination fees you pay when refinancing are based on the amount you borrow. A reasonable fee to pay for originating the loan is 1% of your loan amount. With a California mortgage, 1% is a hefty fee. None the less, because loan representatives are paid by commission, greed is unfortunately a factor. This is where Yield Spread Premium comes in.
What is Yield Spread Premium? Simply put, Yield Spread Premium is the markup of your California mortgage rate by the loan originator to boost their commission at your expense. Heres how it works. When a wholesale lender approves your California mortgage application, you qualify for a specific mortgage rate based on your credit, qualifying ratios, and other details of your application. The wholesale lender guarantees this mortgage rate to your loan representative; however, the representative is paid a bonus for marking it up. For every quarter percent you agree to overpay, the representative is paid an additional one percent of your loan amount.
The difference between the California mortgage rate you qualified and the one your loan representative offers you is Yield Spread Premium. The good news is that you can avoid paying Yield Spread Premium when refinancing your California mortgage loan. Homeowners who learn to recognize this markup can negotiate with their loan originator not to pay it. You learn more about refinancing your California mortgage loan without paying too much with a free mortgage tutorial.
To get your FREE six-part Mortgage Refinancing Tutorial, visit RefiAdvisor.com 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 free video tutorial: "Mortgage Refinancing - What You Need to Know," which teaches strategies for finding the best mortgage and saving thousands of dollars in the process, visit Refiadvisor.com.
Claim your free mortgage refinancing tutorial today at: http://www.refiadvisor.com
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