If you are looking into refinancing your home loan, there are a number of different fees and costs that can result in you paying too much. To get the lowest interest rate you can, and lower monthly home loan payments, you must avoid unnecessary fees and costs. Here are some tips which will help you avoid paying too much when refinancing your home loan.

Retail Home Mortgage Loan Interest Rate Quotes
Were you aware that mortgage lenders make a commission for arranging the loan refinancing or modification, like any other retail product? Refinancing with the “Par” rate, which is the whole sale interest rate, is a much better way to go.

So, What is a “Par” Mortgage Interest Rate?
Basically, a “Par” rate is one in which there are no costs for any kind of points, or additional markups from the mortgage lender. This does not mean that the mortgage lender will not receive pay for doing their jobs, it is just better to pay any fees upfront as opposed to adding them into the home loan and paying interest on them year after year. Their two different ways in which a mortgage lender will get paid. The loan origination fee and a percentage “bonus” for getting you, the homeowner, into the highest rate they can, even if you actually qualify for a lower interest rate.

Getting a “Par” Mortgage Interest Rate IS Possible
It is not extremely difficult to get a “Par” mortgage interest rate when you are looking into refinancing your home loan. Finding the right lender is the key to avoiding paying extra closing costs and other fees that are not needed. So, where can you find the lender who offers “Par” wholesale Mortgage interest rates? It will not be the smooth talking, big office, large sales staff, mortgage lenders or banks. This is because of their expensive overhead costs, and their extreme profit margins.

Beware of Mortgage Rate Markups
A mortgage rate markup is the fee from the lender when your interest rate is overcharged successfully. Also called a “Yield Spread Premium” this is a bonus the lender will pay the broker. Typically a bonus of .25% of the mortgage amount is given for every 1% the mortgage lender is able to get you to agree to in higher interest rates. This is a costly move the broker makes, on your behalf. This money could be better off in your pockets, and can easily equal thousands of dollars per year.

A good choice for homeowners looking to get a mortgage refinancing or modification and avoid extra fees and costs, is choose a small, or self employed mortgage broker. These lenders do not have the expensive costs of larger firms, and are much more flexible on their costs. Once you fully understand the terms of your home loan, a mortgage lender or broker like this is not all that hard to find.

-M Petrone

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