Strategies to Negotiate your First Mortgage – Ask Bruce Coleman, Vancouver Mortgage Broker
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Strategies to Negotiate your First Mortgage
It doesn’t matter if you are just about to buy your first home or your third home, you still have to deal with a lender. Many people simply accept the terms and conditions of the mortgage and the rates being offered without a second thought.
However, you may not be aware that some aspects of the mortgage can be negotiated where you might just end up with a much better deal that can save you money.
You may not necessarily have a lot of wiggle room, but every advantage you can wring from these tight fisted lenders still means more money in you pocket. The bottom line is that everyone wants to get the best bang for their hard earned buck.
So, what areas can you negotiate and what are some of the negotiating strategies can you use to get a better mortgage deal on your Vancouver home?
One of main areas where you might have some latitude to negotiate is on the interest rates you pay for your Vancouver home mortgage.
Negotiating Strategies for Interest Rates
Most of the large mortgage lenders advertise their rates. However, did you know that most of these large lenders are inclined to advertise the maximum interest rates that they would prefer to charge? Also, they are not the only players in town because there are dozens of smaller lenders who don’t advertise their rates which tend to be generally lower then the big players.
If you have a good credit rating and have obtained a pre-approved mortgage with one of the big lenders, you could be in an ideal position to negotiate. If you’re in good financial standing, all lenders both big and small are in competition to get your business.
If you’ve been offered a better rate by another lender, you might be also be interested in knowing that most of the larger lenders have up to a 1.5 % leeway on the interest rate they are advertising.
If you already have your accounts, RRSP, credit cards or have had personal loans with the bank that has already pre-approved your mortgage, don’t you think you ought to qualify for their lowest possible rate? Why not negotiate for the best possible rate you can get?
The lender who gave you the pre-approved mortgage obviously wants your business so why not ask for a better deal if you’ve also been offered a better deal on your mortgage rates elsewhere. And, if they won’t budge, then go with the better offer because it’s their loss not yours.
Another way to sweeten the mortgage negotiation is if you have some of your business with one more other institutions. You could negotiate a better interest rate simply by offering to swing this other business their way if they give you a better deal on your mortgage.
Down Payment Negotiating Strategy
Another strategy you can use to get a better mortgage rate entails your down payment. Now here, you have to be able to have more than 20 % of a down payment on hand before this strategy can be put into play.
Suppose you’ve saved as much as 25% for a down payment for your prospective home. You could start the process by telling the lender you have 20% for the down payment. After you’ve received a pre-approved mortgage and you’ve located the house you want to buy, you could go back to the lender and advise them you would be prepared to up your down payment to 25% if they could give you a better rate.
If they aren’t prepared to give you a better rate then just remind them there are plenty of lenders out there who would be happy to give you a better deal on your interest rate.
Lenders are in fierce competition for your business so why not take advantage of this competition and negotiate a better interest rate and save money.
