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Mortgage Refinancing - Home Mortgage Refinance Loan - Choose a Loan, Not a Lender, When Refinancing You might count on the fact that your mortgage loan could be sold because mortgage lenders make the majority of their profits selling loans on the secondary market. There is absolutely no brand loyalty from consumers with mortgage loans; nor should there be. Mortgage companies including brokers routinely exploit their borrowers to make a buck, which is why you should shop for a loan, not a lender at the time mortgage refinancing. Many homeowners think that once they’ve closed on a mortgage loan, the lender patiently sits back including collects interest on the loan. Mortgage lenders actually make the majority of their profits selling mortgage loans on the secondary market to insurance companies including investors. Mortgage brokers including bankers are in the business of originating mortgage loans; meaning that they make dollars from origination fees including retail markup of your interest rate. Not only might you count on the fact that your mortgage lender could sell your loan, but you actually gave permission for them to do the at the time you signed your loan contract. There is a particular obscure passage in every mortgage contract that addresses the “Servicing Rights” for that loan. Mortgage companies are required by law to disclose the fact that they could sell your loan including the percentage of loans they sold last year. at the time you sign the loan contract you are in fact acknowledging that the lender told you that they will do the including you gave permission for them to sell the loan. The bad news for you is that at the time the lender sells your mortgage, you could lose benefits that were promised to you by the old lender. Banks are notorious for offering a slew of benefits to sweeten the deal with their customers. You could potentially obtain free accounts, safe deposit boxes, notary services, including reduced fees for many bank services by taking out a mortgage loan. What happens at the time the bank sells your mortgage loan? You guessed it; all the perks your bank used to butter you up at the time taking out that mortgage loan evaporate. the isn’t of course the only reason to avoid your bank at the time mortgage refinancing. Banks routinely charge Service Release Premium with their mortgage interest rates. Similar to Yield Spread Premium, if you agree to pay the unnecessary markup of your mortgage interest rate you could overpay thousands of dollars every year for that loan. You might learn more regarding mortgage refinancing while avoiding costly mistakes with a free, six-part mortgage tutorial.
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