Shylock Mortgage Brokers - What They Hide From You

A greedy mortgage broker knows that a home is one of the three basic necessities and it is therefore everyone’s desire to own his or her own home including you. It is this desire they exploit believing you will be gullible. This article is written to protect you.

One act you must avoid making is accepting an ARM loan simply because you are persuaded to do so.

The reason why is that lenders have a preference for ARM over fixed rate mortgages as it enables them to lend out higher sums. Of course, the higher the amounts lent, the higher the profits you make.

There exists another danger. The low rates offered at most times are introductory- they are sweeteners simply to entice the borrower- you- to grab the offer. We regularly see adverts with low ball rates advertised on the Net. The brokers know this.

Unfortunately for the borrower, the mortgage lender is bound to increase the rates to their true levels within two years leaving your purse leaner than expected. This is plain deception. Do not therefore fall for it. Even if it is not the mortgage lenders desire to increase rates, the Fed may do this for them whenever they decide to tighten monetary policy.

To avoid being fleeced, it is best you go for a fixed rate mortgage where the risk are determinable and in the long run, very beneficial.

Also, ensure you negotiate the fees of the mortgage broker. Many mortgage brokers accept 1% or half a percent more. There is no reason why you should pay much more for his service. If he refuses to reduce his fees, you can go elsewhere. It is best you make you view on this matter clear from the start.

Thirdly it is not compulsory you pay PMI. It is another deceptive act. Not paying this will save you a small but sizable amount especially if you intend top own several houses.

If you apply the above situation when buying a home, you will definitely save yourself a lot of money. Ensure you work hard on finding a reputable mortgage broker.

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Understanding Mortgage Rate Quotes When Refinancing

If you’re in the process of refinancing your home mortgage, comparing rate quotes when shopping for a new loan can save you a lot of money. The problem for most homeowners is that they don’t know what they’re looking at when comparing quotes. Here are several tips to help you compare mortgage quotes and find the perfect mortgage when refinancing.

The first thing you should know when comparison shopping mortgage quotes is that lenders don’t care about quoting accurate mortgage rates. Try calling around and you’ll get a wide range of interest rates ranging from reasonable to absurd. Most mortgage brokers lowball their mortgage quotes just to get your information. In order to properly determine a homeowner’s mortgage rate it takes 17 items on an application; the quotes you receive without this information are next to worthless.

Another reason your loan representative has no interest in quoting you an accurate interest rate is that they plan on raising your mortgage rate before closing.

Loan originators get paid for charging homeowners above market interest rates. Your broker wants you to believe they’re working hard to get you the best deal possible; however, they’re actually inflating your loan for a commission. This markup of your mortgage interest rate is called Yield Spread Premium and according to the HUD Secretary will cost American homeowners nearly sixteen billion dollars this year.

How can you avoid this unnecessary markup of your mortgage rate while comparison shopping for a new loan? Homeowners who learn to recognize Yield Spread Premium can negotiate with their loan originator to avoid paying the markup. You can learn more about refinancing your mortgage without paying too much with a free mortgage tutorial.

To get your FREE Mortgage Refinancing Video Toolkit, visit RefiAdvisor.com using the link below.

Louie Latour specializes in showing homeowners how to avoid costly mortgage mistakes and predatory lenders. To get your hands on this "Mortgage Refinancing Toolkit," which teaches strategies for finding the best mortgage and saving thousands of dollars in the process, visit Refiadvisor.com.

Get your free mortgage refinancing tutorial today at: http://www.refiadvisor.com

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