Negotiation Tactics To Use For Your Mortgage
For the overwhelming majority of people, a house is by far the most expensive purchase that they will make in their life. Additionally, since it takes such a long time to repay your mortgage, tiny differences in things like the length of the loan and the interest rate can make a huge difference in how much you end up paying in total.
This is why negotiating to make sure that you’re getting the best rate possible for a mortgage is critical when you decide that you’re ready for a home. To help you out, we’ve put together this list of negotiation tactics that you can use when applying for a mortgage.
Build a strong application
First things first, we want to clarify that you have more power than you might think when it comes to negotiating your mortgage. This is because banks and lenders are constantly looking for reliable people to lend money to who will repay them on time (banks make their money by loaning money to people and charging interest on the loan). By proving to the bank that you’re a responsible person who will repay them, you make yourself look more appealing.Verify your mortgage eligibility (Oct 28th, 2020)
Here are a few ways that you can do that:
- Really make an effort to build up a strong credit score over the months/years before the negotiation
- Save more so that you can put down a larger down payment.
- Pay off some of your other debts before approaching the negotiation table. This will give you a stronger debt-to-income ratio.
Speak with a few different lenders
It’s always a good practice to speak with multiple vendors before buying and the same goes for getting your mortgage. If you decide to go with the first mortgage rate that you’re offered, then you will never know if you could have gotten a better time.
Spend a few weeks talking with different lenders to get an idea of what a common offer is before making any decisions.Verify your mortgage eligibility (Oct 28th, 2020)
Closed mouths don’t get fed
There is an old saying that closed mouths don’t get fed. Said another way, “Ask and you shall receive.” This means that if you don’t ask for something, you have no chance of receiving that thing. In this case, simply try asking for a better rate. Remember, negotiation is a two-way street and you don’t need to always say yes to their first offer. You’d be surprised what people will say yes to sometimes.
If their answer is no, this brings ups to our next tip.
Be prepared to walk away
This is a huge part of negotiating. Be prepared to walk away from an offer that you feel isn’t in your best interests. This is also why it’s important to speak with a few different vendors. If you have a few different offers, you can leverage them against each other to try and squeeze a better rate. Let them know that if they can’t help you out then you’re happy to work with one of their competitors!
We hope that you’ve found this valuable and will put some of these tactics to use when it’s time to sign for a mortgage! If you’re interested in reading more, please subscribe below. This way you’ll get alerted of new articles as we post them.Show me today's rates (Oct 28th, 2020)