Homeowners looking into refinancing should know that there are some fees and costs involved. These costs can equal thousands of dollars and easily eat into any potential benefits a refinance may have for you. If you are looking to refinance a mortgage, here are some tips that will assist you in getting the best deal possible, and avoid some expensive fees and costs.

Understand Mortgage Interest Rate Quotes
Did you know that the interest rate a mortgage lender or bank offers you already includes some commission for the person who arranged it? It does, but there is good news. You can get a mortgage interest rate at what is known as the “Par” or wholesale rate. This is a much better, and more money saving way to go when refinancing a mortgage.

What are Pat and Whole Sale Mortgage Interest Rates?
Simply put, a wholesale rate, or “Par” rate is one which includes no additional fees or commissions included in it. While this does not mean that there are no profits for the lender to make, it does limit how much they can make. They will make their profits from closing costs, loan origination and other fees. However, they will not be making profit off of your monthly mortgage payments. If your not getting the wholesale or par interest rate, that means you are paying additional, and unnecessary money.

Obtaining Par Mortgage Rates is Not Impossible.
It is not impossible to find par or whole sale mortgage rates for the average homeowner. The key to getting these interest rates when refinancing a mortgage is finding the proper lender or bank. Typically smaller or mid size lenders and banks are most likely to offer you these options. They have less overhead and expenses, and can afford to profit only on the closing costs and refinancing fees, and not on the actual interest rate. While they may cost a little more in fees, the long term savings are more than worth it if you are able to obtain a whole sale interest rate.

Always Look Out for Mortgage Interest Rate “Premiums”
A lot of times, mortgage lenders and banks charge a “Yield Spread Premium” many homeowners already pay this fee and do not even know it. This is a commission bonus paid to the person who arranged your home loan. This bonus gets bigger the more they are able to overcharge you on your interest rate. This amount can be as much as 3% of your total loan cost. Always be aware of this fee, and ask about it before agreeing to anything.

Refinancing a mortgage
is a great move for a lot of homeowners. Many people can save a lot of money on interest rates and by getting better mortgage terms and conditions. Take action now, but always be aware and ask questions whenever you think of them.

-M Petrone

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