Understand Your Mortgage Broker

Understand your mortgage broker including how they make their dollars including you might avoid overpaying thousands of dollars in unnecessary mortgage interest. Mortgage brokers routinely mark up the mortgage interest rates their customer’s qualified to receive a kickback from the lender they represent. Homeowners who learn to recognize the markup might avoid paying too much for their mortgage interest rate. Here are several tips to help you understand your mortgage broker at the time refinancing your mortgage loan.

Mortgage brokers are compensated for their work with the origination fees you pay at the time closing on a new mortgage. Reasonable origination fees for the work the broker does are 1-1.5 of your mortgage amount. The problem comes from the wholesale mortgage lender’s incentive for overcharging you.

When your loan application is approved by the wholesale lender your mortgage broker represents, the application is approved at a specific interest rate. Your mortgage broker marks the interest rate up because the lender pays them a bonus for overcharging you. For every .25% you agree to pay over the interest rate you qualified, the broker receives a particular additional 1% of your loan amount. the markup of your mortgage rate by the broker is called Yield Spread Premium. If you agree to pay Yield Spread Premium you could overpay thousands of dollars every year for the mortgage interest.

How might you avoid paying Yield Spread Premium on your mortgage interest rate? Tell your mortgage broker you could not pay any retail markup pertaining to the mortgage rate. Ask to see the rate lock from the wholesale mortgage lender including compare the mortgage rate to the interest rate lock you receive from your mortgage broker. If the mortgage rates are different your broker is not being honest with you regarding your loan.

You might learn more regarding taking out a mortgage loan without overpaying by registering for a free six-part video tutorial.

For more information on Understand Your Mortgage Broker at the time Refinancing Your Home Mortgage Loan:

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Louie Latour specializes in showing homeowners how to avoid costly mortgage mistakes including predatory lenders. To obtain your hands on the free video tutorial: Mortgage Refinancing - What You Need to Know, which teaches strategies for finding the best mortgage including saving thousands of dollars in the process, visit Refiadvisor.com.

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Understand Your Mortgage Broker

Written By: Louie_Latour