Ditech : Mortgage Refinancing – Win Smart Win Ugly Strategies to Getting the Best Mortgage Rate

Qualifying for the best rate when mortgage refinancing will save you money and lower your payment amount. Mortgage companies want you to overpay as much as possible; knowing how to refinance without paying their markup of your mortgage rate will help you qualify for the best interest rate when mortgage refinancing. Here are several “Win Ugly/Win Smart” strategies to help you avoid paying too much for your next mortgage loan.

Mortgage companies and brokers routinely mark up the mortgage rate you qualify for to boost their profits. This retail markup of your mortgage rate is called Yield Spread Premium and can result in paying thousands of dollars in unnecessary mortgage interest every year. Your Mortgage Company or broker marks up your interest rate because they receive a bonus from the wholesale lender for overcharging you.

How can you avoid paying Yield Spread Premium when mortgage refinancing? Tell your mortgage company or broker you will pay reasonable (no more than 1.5%) origination fees, loan processing fees (no more than $400) and closing costs. Tell them you will not pay their retail markup or Yield Spread Premium on your mortgage rate. Ask to see the original guarantee of your interest rate from the wholesale lender.

If the mortgage company or broker refuses to show you the wholesale lender’s guarantee, find another mortgage company that will. Treat these people like used car salesman and you will avoid the majority of mistakes homeowners make when mortgage refinancing. You can learn more strategies for refinancing your mortgage loan without overpaying by registering for a free mortgage tutorial.