Chicago, Illinois (PressExposure) September 04, 2009 -- Refinancing a home mortgage can save you a lot of money if you are able to get a acquire deal on a new loan. However, there are a few things you can do to help avoid costly mistakes in the refinancing process. I have included several tips which will help you avoid the common costly mistakes that can occur in a refinance.
Caution: Be Aware of Yield Spread Premiums
The majority of homeowners are completely unaware of a Yield Spread Premium, what it is, or that they have been paying it since buying their house. Basically, the yield spread premium is your mortgage lenders or brokers commission on your loan. They broker or lender will add to your interest rate to pay their commission.
This rate of pay usually equals 3% of the homes total price which will be added on to your monthly mortgage payments. Your mortgage broker or lender will typically never inform you of these charges and the actual amounts are buried in the loan documentation. The wholesaler of the loan will give a bonus to mortgage lenders and banks who charge as high of an interest rate that they can.
It is Possible to Refinance your Home [http://www.RefinancingCondo.com] at a Wholesale Mortgage Rate
The smart homeowner who realizes and knows how to recognize a yield spread premium can usually avoid paying unnecessarily high markups on their interest rate. The best way for you to do this is by negotiating with mortgage lenders and brokers to get the lowest rate possible. There is already closing costs and fees the broker or lender will profit on and the yield spread premium is not needed and taking money away from you for no reason.
Refinancing a home mortgage can be a very financially wise move to make. However, basic research on potential lenders and brokers, along with patience and simple negotiating can easily save you hundreds of dollars every single month. Refinance now and see the benefits next month.