There are many ways that a borrower and a mortgage company can come together. Perhaps you saw an advertisement and called them. Alternatively, perhaps they called you. Many wonder, “How did they get my name?”

If you are currently a homeowner, some of your information is public record. Many mortgage companies have access to your local county courthouse, where they are able to ascertain your name, address, current mortgage company, how much you paid for your home, and many times even your phone number. Using this information, they determine if you are a likely candidate for their programs, and give you a call.

Tip: When receiving an unsolicited call from a mortgage company, many people ignore the messages. That will prompt the mortgage company to continue calling. You can banish your name permanently from their call lists simply by telling the caller to remove your name from their list. By law, they cannot call you again. If they do, you can contact the FTC, and in some cases earn hundreds of dollars!

No matter how you come across the mortgage company, you decide that you are willing to go forward with the mortgage process. You pick up the phone, and you inquire about one. Lenders MUST follow certain guidelines when handling your call. They are NOT allowed to prejudge you. For example, if you call them and volunteer information such as “I filed bankruptcy last year,” they cannot tell you that you will not qualify for a mortgage. How can they? They have not even seen your credit report! By law, they must encourage you to take an application IF YOU DESIRE. By telling you that you will not qualify, they, in essence, have made a credit decision without looking at your credit report. They then MUST send you a form within 30 days detailing the decision they made. This process of making a credit decision without an application is illegal.

However, they CAN legally tell you what their guidelines are. For example, they can say, “With regard to bankruptcy, our general guideline is that we can loan up to 70% of your home’s value. Would you still like to take an application?” What the lender is doing is presenting you with their guideline for a certain situation. It places the burden back on the borrower to decide whether to make an application. No credit decision took place on the part of the lender. There are several nuances to this law, but it is pointless to discuss. Suffice it to say that if you suspect that a lender discouraged you from taking an application, or if they made a credit decision without pulling credit, they have broken the law. This may be a sign that this is the sort of company you do not want to send all of your personal information to.

If you are considering refinancing your home mortgage loan there are a number of pitfalls that can cost you thousands of dollars. Mortgage companies routinely mark up your mortgage interest rate to boost their commission. If you unknowingly agree to this markup you’ll overpay every month you keep the loan. Here are several tips to help you avoid being taken advantage of when mortgage refinancing.

The retail markup of your mortgage interest rate is called Yield Spread Premium. Dishonest mortgage companies and brokers use this markup to line their pockets at your expense and it’s perfectly legal. Mortgage loans are commodity products just like kitchen appliances; there is a wholesale lender that approves your loan, and a retailer that marks up the loan for a profit. The problem with this retail markup is that you’re already paying origination fees for their services. Agree to pay Yield Spread Premium when refinancing and you’ll pay double, even triple for your new loan.

Here’s an example of how Yield Spread Premium works. Suppose you’ve agreed to refinance your home for $300,000 at 6.5%. What your mortgage broker isn’t telling you is that you qualified for a 6.0% mortgage rate; however, they’ve marked up the interest rate to 6.5%. The broker does this because the wholesale lender pays them 1.0% of the loan amount for every .25% they inflate your mortgage rate. In this example the mortgage broker pockets the $3,000 you’re required to pay in origination fees, plus $6,000 from the lender for a total of $9,000!

You get stuck paying thousands of dollars unnecessarily and the mortgage broker walks away with nine grand! Does this sound like theft to you? It’s blatant, perfectly legal, and happens on nearly every loan originated in the United States today. The good news for you is that you can avoid paying Yield Spread Premium when refinancing your home loan. Homeowners who learn to recognize this unnecessary markup can negotiate when comparison shopping to avoid paying it. You can learn more about Yield Spread Premium and other costly pitfalls to avoid when refinancing your home with a free mortgage video tutorial.

Online mortgage quotes are quick and easy. The process can be done within 5 minutes at home or in your leisure time. Getting a mortgage loan quote from an online loan quote specialist has many advantages and benefits. to name a couple:

1. Getting a reply from an online loan quote services is much quicker and takes less of your time than going the conventional bank route. A loan officer will contact you immediately usually with 1 - 48 hours. Some times they call you within the hour and are able to get the loan process started then and there.

2. Online consumers are able to receive several quotes and compare the rates of several lenders instantly. They will be able to receive estimates on closing costs as soon as they apply for the loan rates.

3. When traditionally applying for a loan in person, a lender is not required to provide a "good faith estimate" until 72 hours after receiving the application. With an internet mortgage quote specialist they want your business and can provide you with a good faith estimate faster, which saves you time.

4. You will save money by applying online since the process of complete an application costs less for the lender, which in return will save you some closing cost fees. When a loan inquiry is filed online, the consumer does not need to visit the bank's office and meet with an agent, everything can be done online. Often lenders will give discounts on internet rates, closing costs, and loan origination feeds.

5. There is an enormous amount competition among online mortgage quote lenders, and in order for them to survive they must provide you with the best possible rate available or they simply won't get your business.

In conclusion, applying at a respectable online quote provide allows you, the consumer to save time, money (very important factor), and get to the closing table faster.

The option arm mortgage loan has gotten a lot of bad publicity lately, and it's about time. The option arm became popular about 6 years ago and many people are in a mortgage that they did not understand. If your thinking about getting into an option arm do not count on a loan officer to give you all of the details to make an informed decision. Most of the people that are currently in an option arm mortgage would not have chosen it had they known all of the details. Why have so many people gotten into a mortgage they would not want? It's because the mortgage company. lenders and brokers alike, have promoted this program as if it were the best thing since sliced bread.

So why are mortgage companies promoting a bad mortgage product? The answer is that it's really not a bad mortgage product for the right person which equates to less than 1% of the american public. It is a bad mortgage product for the other 99.6% of us. The option arm has been pushed onto everyone including those that would be in a worse financial position by taking it. This started a few years back with the mortgage industry saw something that they could promote on television, radio and the internet to lure the masses to inquire. That bait is the low payment option that this mortgage offers. This is the only benefit of this loan. Many lenders and brokers would tell you all about the low payments but fail to disclose the negatives. There are many draw backs such as the fact that most option arms adjust monthly (all of them until recently). Most people currently in an option arm are paying 8% or more just for the privilege to make reduced mortgage payments. There is negative amortization in which the interest you do not pay gets tacked on to your mortgage balance every month. Unless you need the flexibility of a very low payment and are willing to pay a premium in the rate, it wont benefit you.

Mortgage companies would not only use the low payments promote this option arm, they would use other false and misleading statements as follows. Many loan officers would advise their borrowers to use the savings from the mortgage payment and invest in something else and get a better return on the money. If you are told this, run. This is bad financial advice because if your paying 8% interest on your entire mortgage balance, it does not matter if you get a 100% return on the few hundred dollars that you save per month. Many loan officers told people that the 1% rate is fixed for 5 years. This is a false statement for the one month option arm. You will not get a fixed rate mortgage for 5 years for less than 5% annual interest. If it sounds to good to be true, it probably is. Unfortunately, the mortgage industry has taken advantage of the fact that most people trust the loan officer they working with. This holds true to almost every mortgage company that offers the option arm, including the big well known mortgage lenders that I wont name here. Loan officers that work for a lender or a broker all have the same motive and that is to sell you a mortgage loan. They all have production requirements so they want to sell more loans. Most people think that it's extra money that the loan officer makes when promoting this loan and while this is true to some degree, it's really because it is easier to sell. They sell low payments and no negatives. So if you are looking for an option arm make sure you ask for the disclosures up front. Do not pay for anything or continue with the loan process until you know exactly how often your interest rate will adjust and by how much. You need to get this in writing and I can not stress that enough, before you get the closing papers. If you do choose and option arm I would suggest the new 5 year fixed rate option arm that has a lower interest rate.

For those of you that currently have an option arm, you have a couple of good options right now. If you have monthly income that is pretty stable on a monthly basis, you should look at a standard mortgage product that does not have negative amortisation to get the lowest interest rates. If you have income that does fluctuate, you should look at 5 year fixed rate option arm that has an interest rate of about 6 to 6.50% as of the date of this article. This is about 2% less than the monthly adjustable option arm that your probably in right now. You may want to convert to this type of option arm if you want to have the same low payments that you have now.

This option arm is good for those that have income that fluctuates monthly. It allows you the benefit of low monthly payments when you have less income that month. You should then pay more when you have high income months to offset the negative amortization. As long as your understand that you are paying a higher interest rate and how often that fluctuates, you can now determine if that is worth the flexibility of low payments that this product offers. If you are self employed, on commission, have income that may be unpredictable in the future, it may very well be worth it. As with any mortgage loan, you will want to compare option arm quotes first.