San Diego Mortgage Refinancing Information ? Beware Unnecessary Mortgage Fees
If you are in the process of refinancing your San Diego mortgage loan online, there are a number of unnecessary fees you need to watch out for. If you’re not careful it is very easy to overpay thousands of dollars when taking out a new home mortgage refinance loan. Here are several tips to help you avoid paying these unnecessary and often hidden mortgage fees.
Computerized Loan Origination Fees
Many online mortgage portals charge a computerized loan origination fee if you take out a mortgage loan using their site. These sites claim there is no charge to you for using their services; however, the Good Faith Estimate from your San Diego mortgage company will show a fee of up to $1,300 for using that website’s services. This is in addition to the origination fees you pay the mortgage company you refinance with. Before shopping with an Internet web portal such as Lending Tree read the fine print found in the Licenses and Disclosures before using that website’s services.
Mortgage Refinancing Origination Fees
Origination fees are paid to your mortgage company for preparing your loan. Reasonable origination fees run between 1-1.5% of your loan amount. Origination fees are often referred to as “Origination Points,” and one point is the equivalent of 1% of your loan amount. If your mortgage company is charging more than 1-1.5 points for the origination, question them as to why this fee is so high.
Mortgage Refinancing Processing Fees
You will also be required to pay a processing fee when taking out a new home mortgage refinance loan. Processing fees should be no more than $400 and are often paid to a third party company. You can find the amount of your processing fee and who it is paid to on the Good Faith Estimate provided by your mortgage company.
Retail Markup of Your Mortgage Rate
The most common hidden fee you will encounter when mortgage refinancing is the retail markup of your mortgage rate. Mortgage companies and brokers routinely mark up mortgage interest rates to receive as much as three points from the wholesale lender. This retail markup of your mortgage rate is called Yield Spread Premium and will result in your paying thousands of dollars in unnecessary interest in the first year of your mortgage alone. How can you avoid paying retail markup of your mortgage interest rate?
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