Mortgage refinancing can save a homeowner lots of money. However, there are some things which you can do to avoid the most common and costly mistakes homeowners make when refinancing a home loan. Here are a few tips to help you avoid these costly errors, and get a proper mortgage refinancing.

Always be aware of any Yield Spread Premiums
Most homeowners have no idea what a Yield Spread Premium is, or that they have been paying it since they purchased their home. To sum it up, a yield spread premium is the mortgage lenders commission on the home loan.. They mortgage lender or bank will add this “fee” which is basically a minimal increase in interest rates. Typically, yield spread premiums equal about 3% of the homes total value, which is then added on to your monthly home loan payments. Generally, mortgage lenders and banks will not tell you about these charges, and they are usually buried deep in the agreement you sign. Mortgage wholesalers, who offer bulk loans and services to banks and lenders, will give the person who handled your refinancing a commission bonus for every .25% increase in interest rates they can pass on to the homeowner.

It is entirely possible to get a Mortgage Refinancing deal from a Mortgage Wholesaler.
Smart homeowners know how to spot, and avoid, yield spread premiums. The best way for a homeowner to avoid paying this is to negotiate with mortgage lenders and banks for the absolute lowest interest rate possible. Closing costs and other fees associated with mortgage refinancing will make more than enough profits for the lender or bank, and a yield spread premium will just force you to spend more, unnecessary money every month.

Mortgage refinancing
can be a very smart move for homeowners to make. Although, unless you have done some basic research on mortgage refinancing, mortgage lenders, and the refinance process. Negotiating with a mortgage lender can typically help the homeowner avoid extra costs and fees. Homeowners should see how much a mortgage refinance can save them, and take appropriate action.

-M Petrone

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