Mortgage Broker Refinancing - 3 Questions to Ask Your Mortgage Broker
1. Do You Close on the Mortgage in Your Own Name?
This is the single most important question you need answered by any mortgage brokers you are considering. If the answer to this question is yes and the mortgage broker does close in their own name, this person is not actually a mortgage broker. Broker-banks are banks masquerading as mortgage brokers and close on mortgage loans in their own names. Banks and broker-banks are exempt from disclosure laws protecting homeowners from abusive lending practices in the United States. If you refinance your mortgage with a bank or broker-bank you are guaranteed to pay too much for that loan.
2. Are You Charging Yield Spread Premium on the Mortgage Rate?
Mortgage brokers routinely markup mortgage rates to boost their profits. Mortgage brokers are not exempt from disclosing their markup like broker-banks; however, they have clever ways of hiding this markup on the Good Faith Estimate and HUD-1 Statement. The interest rate guarantee your mortgage broker gives you is not the one from the wholesale lender. Ask the mortgage broker to see the original interest rate guarantee from the wholesale mortgage lender and tell them you will not pay retail markup of your mortgage interest rate.
3. Does the Mortgage Have a Prepayment Penalty?
Make sure your new mortgage does not include a penalty for early repayment. Mortgage brokers often include prepayment penalties in the loan contract to discourage your from refinancing down the road. If you accept a mortgage offer that includes this penalty you could be hit with as much as six months of interest on 85% of your loan balance when you need to sell or refinance the mortgage. If you have decent credit there is no reason to accept a mortgage offer with a penalty for early repayment.
You can learn more about refinancing with a mortgage broker, including costly mistakes to avoid by registering for a free mortgage tutorial.
Related Tags: refi home loan, mortgage refinancing, mortgage broker, refinancing information
To get your free mortgage guidebook visit RefiAdvisor.com using the link below.
Louie Latour specializes in showing homeowners how to avoid costly mortgage mistakes and predatory lenders. For a free copy of "Mortgage Refinancing - What You Need to Know," which teaches strategies to find the best mortgage and save thousands of dollars in the process, visit Refiadvisor.com.
Claim your free mortgage refinance information guide today at: http://www.refiadvisor.com
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