If you know how to negotiate on mortgage rates, you can often get a lower monthly payment on your home purchase. You will have to shop around for the lowest available interest rate, in order to be able to negotiate the best deal. If you find mortgage rates that are lower than what your lender is offering, you can request that they match the rate if they want you to use them for your financing.
- When your lender tells you what mortgage rates they offer, do not accept the deal right away. Ask your loan officer to give you a lower rate if you put a larger amount of money down on your home purchase. Many times they will, since their risk on the loan will be less. You may be able to buy your rate down by paying a percentage point on the loan. While this is an added expense at the time of closing, the amount you will save in finance charges over the term of your loan will more than make up for the cost. Also find out if your lender will give you a better rate if your monthly payments are automatically debited from your checking account.
- Contact other lending sources in your town, to compare the rate you have been given with what they have to offer. Many institutions have incentives for customers that bring them new business. If you find lower mortgage rates, you can contact your original lender and tell them they must match the rate. If they refuse, you can cancel your loan application with them and apply at the institution with the best mortgage rates.
- Use your favorite search engine, to check online for low rate lenders. If you want to negotiate on mortgage rates, the more sources you can find with low rates, the better your chances of success. There are many legitimate online lending sources you can investigate. Make sure that closing costs and loan fees do not negate the amount of money you will save from the lower interest rate.
- If you want to hire a mortgage broker, they will negotiate on mortgage rates for you. A broker may not be limited to using lenders that are only in your local area. Since interest rates vary nationwide, the broker may be able to find you a deal that offers considerable savings. Have the mortgage broker explain the fees you will pay him for finding you a lender. You can always walk away if you do not like the deal the broker is offering.