May 31 2008
Mortgage Refinancing With a Fixed Interest Rate Loan
If you have little tolerance for financial risk and are considering mortgage refinancing, choosing a fixed interest rate is usually the safest option. Fixed rate home loans come with higher interest rates than their Adjustable Rate Mortgage counterparts; however, there are steps you can take to pay less when refinancing. Here are several tips to help you qualify for the lowest mortgage rate when refinancing.
The most important concept you need to wrap your head around before refinancing your mortgage is how Yield Spread Premium works. Yield Spread Premium sounds scary and will cost you thousands of dollars unnecessarily; however, once you understand it and learn how to recognize it, youll save yourself a bundle of cash on your mortgage payments.
What is Yield Spread Premium? Simply put, its the retail markup of your mortgage interest rate by the person originating your loan. This person could be a mortgage broker, the representative at your local mortgage company, or the faceless internet giant you find on the web. Every mortgage company, with the exception of banks, works the same way when it comes to originating mortgage loans. They all mark up your mortgage rate to get a bonus from the wholesale lender behind your mortgage.
Fixed rate mortgages already come with higher mortgage rates than a comparable Adjustable Rate Mortgage. In addition to paying this higher mortgage rate youll be required to pay an origination fee for this persons role in arranging your home loan. Heres an example to illustrate how Yield Spread Premium results in paying double, even triple when refinancing.
Suppose you refinance your home loan for $300,000. Your mortgagee broker quotes you an interest rate of 6.75%. You agree to pay a 1% origination fee which is a reasonable amount to pay when refinancing. Think youre getting a good deal? What the mortgage broker isnt telling you is the interest rate you qualified is actually 6.0%. Theyve marked it up to 6.75% because the wholesale lender pays them 1.0% of your loan amount for every .25% you agree to overpay. In this example you paid $3,000 for the loan origination and the mortgage broker received $9,000 from the lender for overcharging you.
Your mortgage broker walks away with $12,000 and you get stuck paying thousands of dollars in unnecessary mortgage interest. Not such a good deal after all is it? Fortunately for you, once youve learned how to recognize Yield Spread Premium you can avoid paying it. To learn more about refinancing your home loan while avoiding costly mistakes register for a free mortgage video 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 Refinance - What You Need to Know," 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: http://www.refiadvisor.com
Mortgage Refinancing - Fixed Interest Rate Loans
If you are in the market for a new mortgage loan, choosing the right type of mortgage could mean the difference between savin...
Mortgage Refinancing - Avoiding the High Cost of 30 Year Mortgage Loans
The traditional 30 year fixed interest rate mortgage is still the most popular mortgage option as it allows homeowners to qua...
Refinancing First and Second Mortgage into a Single Loan
If you have a home loan, perhaps you have considered refinancing your
loan. Homeowners may refinance their home loan to cas...
Mortgage Refinancing What Do Rising Rates Mean for Your Mortgage Loan
Rising interest rates have been a frequent topic in the news this year. Many homeowners are concerned how higher interest ra...
California Mortgage Refinancing - Three Reasons to Get a New Home Loan
There are a variety of reasons for reasons for refinancing your California mortgage. If you are considering refinancing your...
New Hamphire Mortgage Loan
New Hampshire mortgage loan can be organized into two types adjustable rate and fixed rates. Fixed rate mortgage (FRM), both ...
Home Mortgage Loan Refinance - Refinancing a Fixed Rate Mortgage
Refinancing a fixed rate mortgage is usually only suggested when interest rates fall, but you can also save money by changing...
California Mortgage Loan Options
It has been difficult to keep tabs on the mortgage loan California market. The past few years have witnessed great fluctuatio...
Mortgage Loan Interest Rates
If you are in the process of shopping for a mortgage you need to understand interest rates and which type of mortgage is best...
Refinancing Your Second Mortgage Or Home Equity Loan With Bad Credit
When you see that interest rates are dropping, you may find that by refinancing your home equity loan you will be able to sav...
Refinancing Your Mortgage Or A Home Equity Loan - Which Is Better?
When it comes time to get the money you need to renovate your home, you have some choices to make concerning the financing of...
Mortgage Refinancing - Choosing the Best Mortgage Loan Option
If you are in the process of mortgage refinancing, you might feel overwhelmed by all of the mortgage loan options available t...
Home Mortgage Refinance Loan: Fixed Interest Rate or Adjustable Rate Mortgage
If you are in the process of taking out a new home mortgage refinance loan, choosing the right type of loan for your situatio...
Mortgage Refinancing - Advantages of Traditional 30 Year Mortgage Loans
Mortgage interest rates are rising; as a result, Adjustable Rate Mortgages (ARM) are losing their luster compared to traditio...
Refinance Mortgage - A Convenient Way to Pay Off Your Loans
As inflation rises and the cost of living touches the sky individuals in every income bracket are struggling to make a living...
1st and 2nd Mortgage Refinance Loan - Why Refinance Both Mortgages?
The hassle of making two monthly mortgage payments has prompted many homeowners to consider refinancing their 1st and 2nd mor...
Mortgage Refinance A Guide to Refinancing Your Home Loan
If you are in the process of refinancing your mortgage loan, you may be uncertain of the best way to get started. Doing your ...
Home Mortgage Refinance Loan Watch Out For Bad Mortgage Advice
The mortgage marketplace is full of myths, half truths, and faulty interpretations that result in overpaying thousands of dol...
Refinance Mortgage Loan: The Basics of Refinancing Your Home Loan
Refinancing your mortgage can save you money, get your hands on cash, and help you take control of your finances, if done cor...
Home Mortgage Refinance Loan Researching Mortgage Interest Rates
Mortgage refinancing can lower your monthly payment and get you a lower interest rate. To qualify for the best home mortgage...