Did you know it is possible to refinance your mortgage at wholesale interest rates? Paying retail markup of your mortgage interest rate is completely unnecessary; however, most homeowners don’t even question paying the higher mortgage rate. Here are several tips to help you keep the mortgage rate you deserve when refinancing your home mortgage loan.
If you’re looking to refinance your mortgage with a wholesale mortgage rate, the first thing you need to do is avoid your bank completely. Banks will never give you the mortgage rate you deserve because they mark that rate up to make a profit selling your loan to investors on the secondary market. When a bank marks up your mortgage rate to a higher than market interest rate, the markup is called Service Release Premium.
Secondly, in order to qualify for a wholesale mortgage rate you’ll need to avoid mortgage companies and brokers that include Yield Spread Premium in their rate quotes. Yield Spread Premium is very similar to the Service Release Premium charged by a bank; however, in this case your mortgage rate is marked up for a bonus from the wholesale lender behind the loan. Most mortgage companies and brokers do this without telling you and disclosure is buried deep in your loan paperwork.
Fortunately, homeowners who learn to recognize Yield Spread Premium can avoid paying it and qualify for wholesale mortgage rates. When comparison shopping for a mortgage company or broker you can negotiate for a lower rate by telling the loan representative that you understand how Yield Spread Premium works and will not tolerate it with your mortgage. Negotiate to pay a reasonable origination fee for their services, not more than one percent, and any necessary third party settlement costs. Any honest mortgage company or broker would agree to these terms.
