Are You A Homeowner?

Any homeowner in the process of refinancing their home knows that one of the most important factors in deciding which loan offer to accept is the interest rate. The one thing you may not know is that the rate you’re going to likely pay and the rate that you were approved for are probably two different rates. How do I know this? Read on:

Mortgage loan brokers can be thought of, in a sense, as grocery stores. A grocery store is a retailer, and they buy groceries in bulk from a wholesaler. A mortgage broker works largely the same way. They “buy” interest rates from a wholesale lender, and then mark them up for a profit to pass on to you, the mortgage consumer.

The old rule of not refinancing your mortgage unless you can lower your rate by two percent or more is largely useless in the new economy we find ourselves in these days.

Disclosure of fees is required of mortgage brokers; what isn’t as strictly required is a plain-language explanation of each term or phrase. That’s why they can couch junk fees into innocuous-sounding terms and get away with it.

The lender has to take all the risks in lending into account when figuring their profit. The more risk that thee is in lending out money, the more profit the lender will have to plan on in order to protect their capital. Their goal, being in business, is to write a loan for you that will earn them the most money. Minimizing their risk is the best way of doing just that. Your goal in getting a mortgage is to get the best possible deal at the lowest cost that you can.

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