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Summary: Mortgage Refinancing – YSP Will Cost You Thousands in Unnecessary Mortgage Interest
Louie Latour asked: If you have a mortgage and are not familiar with YSP, you’ve already paid thousands of dollars in unnecessary interest for that loan. Refinance your existing mortgage and you’ll overpay thousands again. What is YSP? Read on to learn about the mortgage industry’s dirty little secret and what you can do to [...]
Mortgage Refinancing – YSP Will Cost You Thousands in Unnecessary Mortgage Interest
div stylefloatleft padding 12pxa hrefwpcontentuploads201011mortagemortgage40.jpgimg srcwpcontentuploads201011mortagemortgage40.jpg title alt adivdivemstrongLouie Latourastrong asked embrbrbrbrbrIf you have a mortgage and are not familiar with YSP, youve already paid thousands of dollars in unnecessary interest for that loan. Refinance your existing mortgage and youll overpay thousands again. What is YSP Read on to learn about the mortgage industrys dirty little secret and what you can do to avoid overpaying when mortgage refinancing.brbrMortgage refinancing has the potential to save you money when done correctly. Mortgage lenders are not in business to save you money the more you overpay the better. In fact, the Housing and Urban Development Secretary recently commented that homeowners overpay sixteen billion dollars every year in unnecessary mortgage interest and fees. If youve never heard the term Yield Spread Premium, or YSP, the Housing Secretary is talking about you!brbrWhat is Yield Spread Premium It is simply the retail markup your mortgage company or broker adds to your interest rate without telling you. They are required to disclose this markup however, they have clever ways of disguising it on the HUD1 statement and Good Faith Estimate. If you dont know what youre looking for, youll probably never recognize the Yield Spread Premium youre paying. Why do mortgage companies and brokers lie about your interest ratebrbrDeception is the nature of the mortgage business. Just like used car salesman, mortgage companies rely on your lack of knowledge when it comes to mortgage loans to boost their profits. Mortgages are like cars more than you know there is a wholesale and a retail market and loans get more expensive as they move from the wholesaler to you. How does it work When you qualify for a mortgage the wholesale lender sets your interest rate. Your mortgage company or broker gives you a written guarantee of the interest rate however, the interest rate you get from your mortgage company is not the one the wholesale lender qualified you for.brbrYour mortgage company inflates the interest rate because the wholesale lender pays them a bonus for overcharging you. Thats right, for every .25 the mortgage company dupes you into overpaying the wholesale lender pays them 1 of your loan amount. Youre already paying and possibly overpaying origination fees to the mortgage company for their services. Just like a greedy used car salesman, the mortgage companies see you with dollar signs in their eyes. These companies want nothing more than to boost their revenues at your expense. Heres an example of retail markup at work.brbrSuppose you qualify for a 300,000 mortgage at 6.75 for thirty years. Your mortgage broker swears you are getting a fabulous deal, one theyve never seen in all their years of experience. What the mortgage company isnt telling you is the wholesale interest rate you qualified for was 6.0. Theyve marked it up .75 and will receive a whopping 9,000 bonus for lying to you! This is in addition to the 4,500 you paid for the privilege of their services in origination fees. The extra .75 amounts to thousands of dollars in unnecessary interest in the first year alone! How can you avoid paying this unnecessary, unethical markup of your mortgage interest rate Learn how to recognize retail markup and you can avoid overpaying for your next mortgage loan.brbrYou can learn more about avoiding Yield Spread Premium and other costly mortgage mistakes by registering for a free mortgage refinancing tutorial.brbra hrefJacobadiv
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