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In addition to the origination fee you pay, brokers receive a commission from the wholesale lender for padding your loan. Mortgage brokers have a bag of tricks for boosting their commission at your expense. Here are several tips to help you recognize when your mortgage broker is taking advantage of you when refinancing your mortgage.
I. Creating Yield Spread Premium by Convincing You to Take a Higher Interest Rate Yield Spread Premium is the “retail” markup of your mortgage rate by the broker for a commission. The broker receives one percent of your loan amount for every quarter percent they overcharge you. This commission is in addition to the perfectly reasonable origination fee you’re paying for their services. Solution: Tell your broker that you will not tolerate Yield Spread Premium and ask to see the rate sheet from the wholesale lender. II. Not Locking Your Mortgage Rate with the Hope of Rates Getting Better to Make More Money Many brokers lie about locking in your interest rate hoping that rates go down so they can charge more Yield Spread Premium on your loan. For example, suppose your broker “tells” you that you’re locked at 6.75; however, mortgage rates drop to 6.25%. In this case your broker is charging you .50% Yield Spread Premium for a bonus of 2.0% of your loan amount. Solution: get everything in writing and ask to see the rate sheet from your wholesale lender. III. It’s Your Fault if I Make a Mistake. Mortgage Broker’s love to pass the buck when it comes to blame for making a mistake. Miss a deadline or fail to lock in an interest rate and your broker will turn it around so it’s your fault. Solution: keep a journal of every phone call or meeting you have with your broker, what was said and what you’ve done. You can learn more about refinancing your mortgage without overpaying your broker with a free mortgage toolkit. To get your FREE Mortgage Refinancing Video Toolkit, 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 "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: http://www.refiadvisor.com refinancing mortgage common tricks -- http://www.refiadvisor.com/pblog/mortgage/wholesale-mortgage-rates-when-refinancing-your-home/ |
