Negotiation - The Mortgage Borrowers Best Tool
Below is a MRR and PLR article in category Finance -> subcategory Mortgage.
Negotiation: The Mortgage Borrower’s Best Tool
Summary
Remember negotiating for your first used car? You likely aimed to get a good deal. Now, as you embark on buying a home and securing a mortgage, it's time to refine those negotiation skills. Doing so could save you thousands on your mortgage.
Article Body
When you bought your first used car, you probably relied on negotiation to snag a good deal. With time, you've matured and are now looking to purchase a home. Here’s the good news: strong negotiation skills can help you save thousands on your mortgage.
Negotiating Fees
Mortgage lenders are notorious for charging various fees?"document preparation, research, and more. However, every fee is negotiable. It’s not as if they’re employing a scribe to craft your mortgage documents. A $300 fee for preparing a standard contract is excessive. Approach these fees critically and negotiate them down. Remind the lender that they have competition and must earn your business. Even saving just $100 through negotiation keeps more money in your pocket. Focus on the substantial fees first, like lender/broker fees for points, before moving to smaller ones.
Negotiating Interest Rates
While you may not sway a full percentage point, even a minor change of a quarter percentage point can significantly impact your total loan cost. The best strategy is to shop around and let each lender know you’re considering other offers. Consult at least three lenders, and consider online options as they may offer better rates than local lenders.
Understanding Points
Familiarize yourself with points, as they represent upfront costs to lower your rate. Known as prepaid interest, points only add value if you plan to stay long-term in your home without refinancing soon. When buying points, negotiate to ensure you’re getting a good deal, potentially saving a substantial amount.
Key Considerations
Lenders understand the profits they aim to make on loans, but they are aware of their competition. They’re typically willing to negotiate a fair deal. As a buyer, your most significant advantage is cash and a solid credit score. A larger down payment places you in a stronger negotiating position.
When seeking your mortgage, be proactive and engage in negotiation for the best available deals. While you may not win every battle, effective negotiation can reduce costs. Remember, successful negotiation is about finding a middle ground with your lender. You can’t have it all, so be prepared to compromise.
You can find the original non-AI version of this article here: Negotiation - The Mortgage Borrowers Best Tool.
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