Everyone else in the marketplace (mortgage companies & brokers) is a retail vendor that sells mortgage products for wholesale lenders. Here are several tips to help you avoid paying too much for next home loan. Your Bank may seem like a convenient way of refinancing your mortgage loan; however, Banks have secret when it comes to disclosing information about their fees and markup. If you’re considering refinancing your mortgage with a bank, you need to read this article.
Bank mortgage loans are often called “correspondent loans" because after the banker completes your mortgage that bank will immediately turn around and sell it on the secondary market. The property may be appraised at a much lower price than its current market value. The problem with taking out a mortgage from your Bank is that they are not required to disclose any of this markup due to loopholes in the Real Estate Settlement Procedures Act.
This means the bank can literally charge you whatever they like and no one is the wiser. If you are not familiar with RESPA, it is the Real Estate Settlement Procedures Act that protects borrowers in the United Sates by setting guidelines for disclosure. The first thing you need to know about banks when considering a bank originated mortgage is that banks are exempt from the Real Estate Settlement Procedures Act (RESPA). Because banks fund their loans with the bank’s money, many people mistakenly think taking out a mortgage from the bank or credit union is going to be cheaper than taking out a retail mortgage loan. Louie Latour specializes in showing homeowners how to avoid costly mortgage mistakes and predatory lenders.
It may be true that mortgage brokers are known for overcharging for their services; however, banks are much worse due to loopholes in the legislation that protects homeowners from abusive mortgage lenders. Because your bank is exempt from RESPA laws, the bank will never tell you how much your mortgage interest rate has been marked up. Banks exploit the loopholes in RESPA to make their loans seem more affordable with the fees and closing costs; however, they hit you with undisclosed SRP markup on your interest rate. It will be assigned a value and will be listed in a publicly-available foreclosures list. If you’ve been researching mortgage loans online you may have heard of Yield Spread Premium.
To get your FREE six-part Mortgage Refinancing Tutorial, visit RefiAdvisor.com using the link below. Your bank is not legally required to disclose anything beyond the Annual Percentage Rate of your mortgage. 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.
Here are several things to consider before refinancing your mortgage with a bank. Now you might be asking yourself how RESPA factors into this. Because banks are exempt to all RESPA laws protecting you from this fleecing, you will never know it happened. It can also keep it as an additional asset, especially when the property is in a prime district.
Banks make the most profit by closing mortgage loans with above market interest rates. To get your hands on this "Mortgage Refinancing Toolkit," which teaches strategies for finding the best mortgage and saving thousands of dollars in the process, visit Refiadvisor.com. Louie Latour specializes in showing homeowners how to avoid costly mortgage mistakes and predatory lenders. Bank mortgage rate sheets also have Service Release Premium built into their interest rates.
A little known loophole in the Real Estate Settlement Procedures Act could cost you thousands of dollars in unnecessary mortgage interest. If it wins, it will have total ownership of the property and may do anything with it. This means the bank can literally charge you whatever they like and no one is the wiser.