If you are looking to refinance your existing mortgage or considering a cash-back refinance loan, here are several tips to help you with the process. Careful comparison shopping can save you a bundle of cash, if you avoid Yield Spread Premium and Computerized Loan Origination fees in the process. Here’s how you can refinance your home mortgage loan while avoiding these costly mistakes.If you’re not familiar with Yield Spread Premium, it is simply the markup of your mortgage interest rate by the loan originator for a commission. Mortgage loans are retail products just like cars; like a car the dealer marks up your mortgage rate for a profit. The problem with Yield Spread Premium is that you’re already paying origination fees for your loan representatives work on your loan. If you pay this markup it’s like paying double (sometimes more) for your home loan, not to mention the unnecessary mortgage interest you’ll pay every year that you keep your loan.Computerized Loan Origination fees on the other hand are fees collected by websites masquerading as mortgage and lending portals. These sites have absolutely nothing to do with mortgage loans and exist only to collect your personal information and sell it to any mortgage lender willing to pay for it. The names of companies online that engage in this type of activity would surprise you; many advertise on television promising to get mortgage lenders competing for your business. The problem with this Computerized Loan Origination fee is that it’s often passed to you on your Good Faith Estimate. Homeowners who neglect to read the fine print before filling out a form and clicking submit can find themselves paying as much as $1,300 at closing unnecessarily. The number one rule of using the Internet with your finances: always read before you click.You can learn more about your mortgage refinance options, including expensive pitfalls you need to avoid with a free mortgage tutorial.
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