6 Tips When Negotiating Your Mortgage
Did you know that you can negotiate your mortgage? It’s true! These 6 tips will give you a better shot at obtaining a lower mortgage.
1. Build Your Credit Score
If you have a low credit score, you’re already off to a bad start. Before you even think about buying a home, start building credit. Be sure to pay off credit cards at the end of every month, and build good financial habits. Improving credit takes work, but it will get you a better mortgage.
2. Get Quotes From Multiple Lenders
Get quotes from at least 4-5 different lenders, banks, or mortgage providers. Don’t go with the first lender you investigate – evaluate the different closing costs, interest rates, timelines, and all other details.
Once you’ve obtained multiple quotes, use these to negotiate with your lender of choice. If they have proof that you’ve been quoted at a lower rate with a competing bank or mortgage provider, they will likely dip their rates for you. You can also ask the lenders to reduce your interest rate by creating a savings account or brokerage account with them.
3. Get Prequalified & Preunderwritten
Before you find the house you want, get prequalified for a mortgage. Getting pre-underwritten is the next step after pre-qualification and it shows lenders that you are serious and trustworthy.
4. Use Discount Points
Discount points are a simple way to reduce the interest rate on your mortgage by making a one time payment at the time of closing. This will make the initial purchase cost higher, but over time can save you thousands of dollars.
5. Make a Large Down Payment
The best way to keep your mortgage payment low has little to do with negotiation and everything to do with a great down payment. This is difficult for many new homeowners, which is why we offer a unique down payment investment to help first time buyers get their house without high mortgage payments.
6. Use an Interest Rate Swap to Max Savings
An IRS, or Interest Rate Swap, is a great way to reduce the amount of interest you pay. With ever-changing interest rates in our current economy, this is an option everyone should be looking at. Learn more about swapping here.
Finding a good deal on your mortgage is hard – but not impossible! Follow these tips to get the lowest interest rate possible and keep your monthly payments minimal.