Negotiation The Mortgage Borrowers Best Tool

Negotiation - the​ Mortgage Borrowers Best Tool
Remember when you​ bought your first used car? Chances are you​ were young and used a​ fair bit of​ negotiation to​ get the​ price to​ where you​ thought you​ were getting a​ good deal .​
the​ years may have went by and you​ are a​ bit older now,​ but now that you​ are working on​ buying a​ home and taking on​ a​ sizable mortgage you​ should sharpen up your negotiation skills to​ put them to​ work to​ help you​ save thousands of​ dollars on​ your mortgage!
Let's start out with talking about fees - all the​ processes and paperwork that mortgage lenders like to​ charge you​ for .​
Document preparation fees,​ research fees - talking about fees fee .​
Each and every one of​ those fees is​ negotiable .​
After all,​ it's not like they are using a​ scribe to​ write out your mortgage documents -- $300 to​ prepare a​ standard mortgage contract is​ a​ bit much .​
Question every fee and work to​ negotiate them down .​
Let the​ lender know that you​ know they aren't the​ only game in​ town and make them earn your business .​
Even if​ you​ knock only $100 off that is​ $100 more in​ your pocket for just a​ few minutes worth of​ negotiation .​
But remember to​ spend the​ majority of​ your time negotiating on​ the​ big fees,​ and not the​ small ones .​
Start with the​ largest fee on​ the​ list - usually the​ lender/broker fees charged for points - and work your way down.
Now let's talk about the​ rate you​ pay on​ your mortgage .​
you​ generally won't be able to​ swing one way or​ another a​ full percentage point or​ more,​ but even a​ small quarter of​ a​ percentage point change can have a​ real impact on​ how much you​ pay over the​ life of​ your loan .​
the​ best way to​ negotiate on​ rates is​ to​ shop around and let each mortgage lender know that you​ are doing so .​
Always shop around with at​ least three mortgage lenders and be sure to​ check out the​ lenders who have setup shop online .​
Sometimes the​ best rate deal may not even be with a​ lender in​ your hometown!
Points is​ another concept you​ should be familiar with as​ you​ negotiate your mortgage .​
Your lender is​ not going to​ give you​ points for free - after all,​ they are the​ upfront costs that lower your rate .​
Another name for points is​ prepaid interest .​
Your best tool here is​ to​ make sure you​ understand that points only have real value if​ you​ plan to​ stay in​ your home for a​ length of​ time and you​ are not planning to​ refinance within a​ few years .​
Having said that,​ if​ you​ decide to​ purchasing points don't be afraid to​ do some negotiation here - you​ could save yourself a​ sizable chunk of​ change by asking your lender to​ work with you​ in​ dealing with the​ points.
The bottom line is​ that lenders know what profits they want to​ make on​ a​ mortgage loan .​
They also know that they aren't the​ only lender in​ town and will generally work with you​ in​ getting your mortgage setup where both you​ and they gain a​ little ground and give up a​ little ground .​
the​ biggest negotiating tool that you​ as​ the​ buyer have is​ cash (and a​ good credit score) .​
the​ more cash you​ can put down as​ a​ down payment on​ your home the​ better the​ position you​ will be in​ to​ negotiate with the​ lender.
As you​ prepare to​ get your next mortgage don't be afraid to​ put some of​ your energy into negotiation for the​ best deals out there .​
Don't expect to​ win every battle,​ but you​ should be able to​ lower the​ costs somewhat by being willing to​ negotiate with your lender --- just remember,​ negotiation means that you​ have to​ meet the​ lender in​ the​ middle .​
you​ can't have it​ all!

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