bankrate mortgage rates
Many homeowners choose their Bank when taking out a mortgage loan. Banks are a convenient way to get a mortgage; however, this convenience comes with a price. Bank mortgages include a hidden fee called Service Release Premium. Here are several tips to help you avoid overpaying for your mortgage if you are considering borrowing from your Bank.
The most important thing you need to know about Bank mortgage loans is that banks are exempt from the Real Estate Settlement Procedures Act (RESPA). RESPA laws protect borrowers by requiring lenders to disclose information about their mortgage profit margins. Your Bank is in the mortgage business to make money and they do this by selling the mortgages they originate on the secondary market.
What is the secondary mortgage market? This is where mortgage debt is pooled together by lending institutions such as Fannie Mae, insured and sold to investors. If you take out a mortgage from your Bank they will turn around and sell the loan as soon as it is funded. The higher your mortgage rate, the more money the Bank receives when selling your loan. This is where Service Release Premium factors in.
Similar to Yield Spread Premium, Service Release Premium is the markup of your mortgage interest rate to boost the Bank’s profits on the secondary market. Your Bank knows what wholesale mortgage rates are; however, the Bank’s rate sheets are marked up to boost their profits when they sell the loans. This markup is Service Release Premium. Because the Banks are exempt from the Real Estate Settlement Procedures Act, they are not required to disclose this markup.
Bank employees will show you their Bank’s mortgage rate sheets, often swearing there is no markup. Ask your Bank representative to pull up the weekly yield on Fannie Mae’s website and explain the difference between Fannie Mae’s yield and the Bank’s rate sheets; they won’t be able to give you an explanation. The bottom line when taking out a mortgage loan: never take out a mortgage from your Bank. You can learn more about your mortgage options, including costly mistakes to avoid with a free mortgage tutorial.
To get your FREE six-part Mortgage Refinancing Tutorial, visit RefiAdvisor.com using the link below.
Louie Latour specializes in showing homeowners how to avoid costly mortgage mistakes and predatory lenders. To get your hands on this free video tutorial: “Mortgage Refinancing – What You Need to Know,” which teaches strategies for finding the best mortgage and saving thousands of dollars in the process, visit Refiadvisor.com.
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Mortgage Service Release Premium
bankrate mortgage rates Questions
Does someone know where I can find the real interest rate I would get for my mortgage?
Does anyone tried www.smarthippo.com or www.bankrate.com? Thanks in advance!
To get an actual, honest quote from anyone, you will need to go through the actual approval process. No one can promise you a rate without knowing quite a bit more about your income, assets, credit and the property you are interested in. Interest rates are based on risk and those websites do not know anything about you, your situation or your property.
You can find rough estimates on sites like that, but be aware that those rates typically involve paying points (pre-paid interest) and may not be what the actual 0 point interest rate is.
If you’d like more information, feel free to contact me directly. I included a link that might help.
What are the costs and cons of a VA hyrbid Streamline IRRRL loan?
Just bought a house last year and have been getting bombarded with these letters about the VA Interest rate reduction loan (IRRRL) programs. At first I thought this was just another sucker scam but then I looked into it pretty indepth. After wathcing hours of videos explaining the calculations, playing on bankrate.com for hours and studying the programs I decided to call a few of the companies and speak with some reps about the programs.
The main questions I still have are what are the CONS of the VA Hybrid 5/1? And most importantly what are the COSTS?? What are the CLOSING COSTS going to be on this?
I love all the benefits and now I am starting to see how the 30 Yr Fixed can be the true suckers bet, ecspecially when there is no chance I’ll ever stay in the same house for 30 years, not even 20 , not even 10 yrs!
I’ve been quoted at 5/1 at 3.25% and 3/1 2.75%.I currently have a $250k fixed mortgage at 4.25%
The 39 year mortgage is just about the best mortgage around. It depends on how you would use this 30 year mortgage to your advantage.
You might pay it off as a 15 year mortgage by increasing the monthly mortgage payment. Check with your lender to see if there is a limit on the amount you are able to pay monthly or annually. Some mortgage lenders have a 20% limit on the amount you may pay per year based on the mortgage balance.
You are able to pay the monthly mortgage semi-monthly, thus taking about 7 years of the number of years you would be making the monthly mortgage payments.
Because you have a 30 year fixed rate mortgage does not mean you have no options.
Most of the mail you are receiving from the various lenders would have partially checked your payment history, thus are able to offer you a certain reduced rate. There are certain questions you would need to ask yourself as well as those that would be providing the mortgage loan.
Most would require no up front fees such as an appraisal, credit report, title and escrow fees. If you are note required to pay point for this mortgage loan you would need to ask it the interest is being increased to cover the point and other mortgage loan cost. This is the case in most mortgage loans that are no fee, no cost..
Find out the cost if you were required to pay the points and fees. Then you would be able to make an intelligent decision as to which is beneficial to you. Remember that you have to pay the interest for the life of the mortgage loan. If you pay the points and fees you may deduct these points and fees for the life of the mortgage loan from your federal income tax.
An adjustable mortgage loan is just that. At some point in the terms of the mortgage loan monthly payment would increase. You would have to be prepared for this increase and know the amount this increase would be.
As one combat veteran to another veteran, thanks for serving.
I hope this has been of some benefit to you, good luck.
“FIGHT ON”
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