Mortgage : Home Loans : Refinance : Home Equity Loans

By Louie Latour

If you are in the process of refinancing your mortgage loan, shopping smartly will help you avoid a fleecing by your mortgage company. Your Mortgage company works for commission and the more they get you to pay, the more money they make. Unfortunately, mortgage companies are rewarded when they con you into overpaying for your mortgage refinancing. This markup of your interest rate by the mortgage company is called Yield Spread Premium and avoiding it will save you thousands of dollars. Here are several tips to help you avoid paying Yield Spread Premium on your next mortgage loan.

Mortgage companies mark up your mortgage rate because the wholesale lender rewards them for overcharging you. The more you overpay, the more your mortgage is worth when sold on the secondary market. For every .25% you agree to overpay your mortgage company is paid 1% of your mortgage loan. This markup results in your overpaying thousands of dollars of unnecessary interest each year! The mortgage company receives this bonus in addition to the origination fee they are already charging you. If you agree to pay Yield Spread Premium you are actually paying double for your mortgage loan.

So how does Yield Spread Premium work?

Suppose your mortgage company tells you they can refinance your mortgage at 6.25%. What your loan representative isn

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For additional Mortgage Refinancing information
and resources visit Mortgage Refinancing.
(http://www.refinance-refinance.net)
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This entry was posted on Friday, December 22nd, 2006 at 4:53 am and is filed under Refinance. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.