My Way Lending

Retirement is not what is used to be as many Baby Boomers are discovering with little to no savings or pensions. Gone are the days where a person could quit a day job and relax in the comforts of a favorite hobby, travel or just plain take a nap. Today, people are working way past retirement age just to make ends meet because what was assumed to be waiting for them in Social Security and other benefits is not there.

Government cut-backs and the lack of preparation from reliance on traditional pension funds has forced changes from the safe stream of guaranteed annuities to self-managed 401ks. Retiree health-care programs are often eliminated. This common scenario leaves people desperate and is where mortgage schemes are capitalizing. While some are just plain fraudulent, others offer relief but — of course — at a cost. One of which is called a reverse mortgage.

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Refinancing your mortgage loan can be a stressful time for any homeowner. No one wants to pay too much when taking out a new loan; however, most homeowners don’t fully understand how loan originators and lenders make their money. Learning how your mortgage broker is compensated for their work will not only help you avoid paying too much but show you how to refinance your home with a wholesale mortgage rate. Here are several tips to help you refinance your home with a wholesale mortgage rate.

First Things First: What is a Loan Originator?

Mortgage loans are retail products like any of the other purchase we make as consumers, and there’s always someone in the middle trying to make a buck. This “middleman” is your loan originator. This person could be a mortgage broker or a loan representative at the mortgage company arranging your loan.

Mortgage loans are funded by wholesale lenders that do not deal with the public directly. You might think that by contacting a wholesale lender you’ll get around the middleman and refinance with a wholesale interest rate; however, most wholesale lender have retail divisions and will not get a wholesale mortgage rate by tying to slip on past the middleman.

How Do You Get a Wholesale Rate?

In order to gain access to wholesale mortgage rates when refinancing you’ll need to enlist the help of a mortgage broker. There are problems you’ll need to overcome to get wholesale mortgage rates; mainly that your mortgage broker is paid by commission and a large portion of their bottom line comes from closing loans with retail mortgage rates.

What Are Retail Mortgage Rates?

Retail mortgage loans include the loan originator’s markup of your mortgage interest rate. In order to fully understand your mortgage loan you need to understand how loan originators, in this case your mortgage broker, are compensated for their work. Mortgage brokers receive their compensation from two sources. The first is by charging you an origination fee, also called origination points, for arranging your mortgage loan.

This origination fee is charged as a percentage of your mortgage amount. Remember that one “point” is one percent of your loan amount and you should never agree to pay more than one percent to the broker for loan origination. If your mortgage broker refuses to negotiate on the origination fee you should find another broker for your new mortgage loan.

The second way that your loan originator receives compensation is by marking up your mortgage interest rate which is what we are attempting to avoid. This markup of your mortgage interest rate by the loan originator is called Yield Spread Premium. According to the Secretary of Housing and Urban Development, unnecessary mortgage rate markup will cost American homeowners nearly sixteen billion dollars this year. Markup of your mortgage rate by the broker is completely unnecessary because you’re paying the broker a perfectly reasonable origination fee for their work. Not only is Yield Spread Premium unnecessary but most mortgage brokers forget to mention that they’re charging you the markup or try and explain it away. If your mortgage broker tells you not to worry about Yield Spread Premium because the fee is being paid by the lender they’re lying to you.

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Related Articles at Mortgage Refinancing Information:

• Wholesale Mortgage Rates


• How to Get a Wholesale Mortgage Rate


• Why Use a Mortgage Broker?


• Wholesale Mortgage Rates When Refinancing Your Home


• Your Ideal Refinancing Mortgage Rate

In an attempt to expand their already growing image as the pros in the Reverse Mortgage industry, Fidelis Mortgage signed an agreement with Radio Advantage in Dallas, representing broadcasting legend Pat Summerall. Mr. Summerall recorded a new 60 second radio spot which is currently airing in the Baltimore, Maryland area. “The partnership with Mr. Summerall will ensure that we gain a much larger share of the Reverse Mortgage market than we already have in Maryland” says Eric Rittmeyer, President of Fidelis Mortgage.

With Reverse Mortgages continuing to break records year over year, it is important that homeowners 62 and over understand how they work. With rising healthcare and energy costs, many senior homeowners are finding it more and more difficult to stay in the home they love. In response to the apparent financial problem’s seniors are facing, the U.S. government created a solution to help seniors enjoy their retirement years. The solution is the Reverse Mortgage. Insured by the Federal Government, the Home Equity Conversion Mortgage (HECM), enables homeowners 62 and over to convert part of their homes’ equity into tax free income without having to sell their home, give up the title, or take on monthly mortgage payments.

“The majority of our clients are living in the home that they raised their families in. They normally have a fairly small existing mortgage against their property, and are pleased to learn that the property does not need to be free and clear to qualify for the Reverse Mortgage” says Eric Rittmeyer. After paying off existing liens, the remainder of the proceeds can be received as a lump sum, a monthly payment, an equity line to be used for future needs, or a combination of all three. There are no income or credit requirements for the Reverse Mortgage. All proceeds of the property go to their heirs when the property is sold.

Found here.