If you are in the process of refinancing your home loan and want the best mortgage rates there are several things you need to know about Florida mortgage rate quotes. The quotes you find on the Internet and from your mortgage broker include markup that could raise your payment by hundreds of dollars. Here are several tips to help you get the best rate when refinancing without paying too much to the mortgage company or broker. Beware Yield Spread Premium This commission based markup of your interest rate is called Yield Spread Premium. It is the percentage of your loan amount created when you lock and close the mortgage with higher than market interest rates. This amount is paid to your mortgage broker as a bonus for inflating your mortgage rate.
An Example of Yield Spread Premium Imagine you're refinancing your home and your existing mortgage is for $350,000. Your mortgage broker quotes you a rate of 6.5%. You agree to pay a one percent origination fee for the broker's services meaning you have to come up with $3500 at closing. What your mortgage broker hasn't told you is that you actually qualified for a 6% mortgage rate and they've marked it up for a commission.
You get stuck paying too much for your mortgage loan and your broker walks away with an extra $7000 from your lender. How Does This Cost You Money? If you choose a fixed rate loan with a term length of 30 years at 6.5 percent your monthly payment will be $2,200. The same mortgage with a 6% rate would have a payment of only $2,090. Falling for this mortgage broker trick will cost you $1,320 every year you keep this loan; all because your broker lied to you! Fortunately for you it is possible to avoid this commission based markup of your mortgage rate and keep more of your own money. You can qualify for wholesale mortgage rates and pay a flat one percent fee to the broker.
All it takes is investing a few hours time doing your homework and you'll save yourself thousands of dollars in unnecessary fees and interest.
Louie Latour specializes in teaching seniors how to get the best florida mortgage rates when refinancing. Before you refinance your mortgage loan, make sure you watch RefiAdvisor's excellent free video guide to florida mortgage refinancing here.