best remortgage deals

If you are considering mortgage refinancing with an adjustable rate mortgage, the total interest you pay depends on the index rate plus your lender?s margin. The margin you pay is supposed to cover the lender?s overhead, operating expenses, and profit; however, many lenders mark up the margin excessively. Here are several tips to help you avoid overpaying your lender?s margin when mortgage refinancing with an Adjustable Rate Mortgage.

The margin most lenders add to your Adjustable Rate Mortgage rate is typically between 2.25 and 2.75 percent. Many lenders mark this margin up 3 to 4 percent or more. If you?ve had credit problems you can expect the margin to be even higher. If you would like to avoid margins altogether, the National Average Contract Mortgage Interest Rate Index is calculated from mortgage rates as opposed to baseline rates, and choosing an Adjustable Rate Mortgage tied to this index has no margins attached.

When comparison shopping for an adjustable rate loan when mortgage refinancing, make sure you are comparing loans tied to the same indexes. Ask your loan representative what your margin will be and get the margin in writing along with your interest rate guarantee. This will allow you to compare margins from one lender to the next Also, keep in mind that mortgage companies use ultra-low teaser rates to distract borrowers from a loan’s actual interest rate and the margin.

You can learn more strategies for mortgage refinancing without overpaying and avoiding expensive mistakes by registering for a free mortgage tutorial.

Remortgage Deals Guide

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