Profile picture for tyler2454

Negotiating Mortgage Rate

Do lending institutions entertain you trying to get a rate "UNDER" what they are offering, even if it is at what your current state rate is?

  • January 06 2011 - Wernersville
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Answers (18)

Best Answer

Hi Tyler. Our biz is much different to yours so maybe you cannot relate. To us we cannot do a deal for no profit, just to get a customer. It's not like selling copier paper where every month we need to sell you more paper and every once in a while we throw you a bone.

I don't think you are rude. You have valid questions. This is why I am shooting straight.

Are there LO's willing to work for less? Yes, of course.

As for LO's taking you serious without a credit report, that's mostly true. Every day we hear from consumers who want want want, but not willing to give an inch. Here is the conversation in a nutshell...

Borrower - "What's your rate?"
LO - "I have no idea, let's get you qualified."
Borrower - "I don't wanna give all my information. I am just shopping around for the best rate."
LO - "OK,...4.5%"
Borrower - "What are the closing costs?"
LO - "But Mr. Borrower, you have not even told me what kind of loan you want and what you are trying to do."

You get the picture. The frustration goes both ways.

If you want to shop rates, you are in the right place. All of us with good reps can help you as we want to protect our good names.
  • January 07 2011
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Hi Tyler,

Are rates negotiable?  It really depends on wheather the lender has given you the "bottom line" upfront for you to consider.  If he / she didn't leave any room for negotiation, then sometimes, that's it.  If they did leave a little room and you're willing to lock into a rate and move forward right away by paying for the appraisal, there may be an 1/8% to 1/4% for the lender to give up to make the deal you're looking for.

Keep in mind that rates change daily, so what was quoted one day may be different the next day (higher or lower).  In my opinion, the best way to shop would be to get Good Faith Estimates from 2 or 3 lenders who you trust (by referral or reputation) and decide the same day to lock in and move forward.  You will find out who you like working with, and who makes the process difficualt for you by not being responsive.  This is a pre-view of what type  of service you might expect during your loan process.

In my opinion, it's ok to "Shop til you drop" for a rate on a refinance, but when it really comes down to financing the purchase of a property, being able to rely on your lender to close on time, or at all is far more important than weather or not it costs a little bit more to go with a reliable mortgage lender.  Quality costs money, and with a purchase, especially, it's better to work with someone you trust and have a smoothe transaction rather than be losing sleep at night because you went with the cheapest deal and the lender is having problems getting loan documents out on time.
  • January 18 2011
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I always tell customers that rates vary depending on program, and their personal factors. When I give the customer a rate, they always have the ability to request a different rate, but it won't come free. In many ways, you can negotitate your rate, just be willing to pay for it because nothing is free.
  • January 17 2011
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Profile picture for tyler2454

Rudi Hoffman is a prime example of why I'm asking so many questions now before I happen to come across a lender or lenders like him. Someone who is useless and a waste of space but anywa. 

Robert thank you I got it now.  What brought it all together was by saying LO's will work for less.  Thank you for being upfront and helpful.  To bad people like Rudi give you guys a bad name.

  • January 07 2011
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Nice seeing you back Robert.

I think we have a troll here. 
  • January 07 2011
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Profile picture for tyler2454
I am a firm believer in quality over quantity but I happen to be in the home health care business and the more people that able to get superior care and get to stay home and live their last days at home the better.  It's one business where quantity is a great thing.  Also when dealing with private duty rates can be negotiated at any time.  It's more about well being and getting people to what they need.

I feel like I am asking, just on here.  If there were a forum about breaking laws that a lot of cops were signed up to also I'd ask questions there rather than ask every police officer I saw.

I understand how fast profit can change in your business but $10 and $2 is still profit and the question is are people in that position willing to take $2. 
  • January 07 2011
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Tyler...I understand where you are coming from. In the end everybody's model for making money is different.  Balance between quality over quanity.  You lean more towards quanity.  The easy answer to your question is "Go ahead and ask".  The one thing that is certain in this business is that our profit changes on what seems to be an hourly basis.  Market changes at a moments notice and what was offered to you a 10AM may be better or worse at 2PM.

  • January 07 2011
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Profile picture for tyler2454
I am a business owner and to me profit is profit and breaking even is ok also just as long as a there is no loss.  The more clients the better, that can result in more word of mouth business, thus increasing profit margins.  I'm certainly not saying I want anyone to take a loss for me, or to just give a borrower what ever they want.  If I compare 5 or even 10 different lenders and they all have the same mind set I will learn nothing.  Thats the only reason why I am asking the question, because I won't have to have my credit pulled over and over to get responses.  Lots of people don't take you seriously until credit is pulled.

I'm not trying to be rude I'm just trying to add more to my other comments because I didn't provide enough initial information.

So... do lenders give lower rates than they initially quote you if you ask and it doesn't completely tank the profit margin?
  • January 07 2011
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Tyler...Obviously there is a certain profit margin that we all work under and therefore can not jsut give the borrower whatever they want.  Some are different than others.  The only way to find out is to do a little comparative shopping.
  • January 07 2011
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Profile picture for tyler2454

Josiah, I'm not trying to be rude but this is just a question.  If the market dictated interest rates why do people need to shop around?  Every lender should just be offering the same rate.

If it were me and I offered someone 4.5% and they wanted 4.25% why not just give the 4.25% and have another customer.  1 customer is better than 0.

Do lenders think that way?

  • January 07 2011
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Hi Tyler. Keep in mind a verbal rate quote, means nothing. A "real" GFE only locks in the fees,..not the rate. So that's not reliable either. This is why I always say to check reputation. If you use some common sense, you will have better chances of getting a great deal. Just don't start calling a bunch of lenders and saying...."I'm shopping around for best rate, this guy can do (insert quote),...what can you do for me?". It just opens the door for less than honest folks.

You will find these days there is about a .25% swing on the rate from Lender to Lender. So don't make yourself nuts making a hundred "what's your rate" calls.
  • January 07 2011
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Profile picture for themortgagechef
There are a lot of factors that go into this.  Have you checked with other lenders to see if you are being quoted a competitive rate.  If the rate is competitive and in line with other quotes, then you can certainly ask, but the answer may be no.  If the lender has quoted you fairly from the get go, there may be some room to lower your origination by a little but keep the rate the same.  The other factor in this is that the market moves throughout the day.  Checking with one lender in the morning may not be the same as checking with another in the afternoon.  Find someone you trust and ask them for their best deal. 
  • January 06 2011
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To simply answer your question.....Yes. All interest rates are negotiable. To what end is the real question. You can only ask the lender to find out.
  • January 06 2011
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Lower rates are almost always available below the "offer", and come with increased closing costs.   Ask to see all your options, and decide which rate/fee selection is best for you.   When you reach a certain point of available rate selections, you will realize the added costs won't be justified below that point.
  • January 06 2011
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Profile picture for VanDyk Mortgage Corp

Lenders don't determine the interest rates... the market does.  The only thing the lender has control over is the profit margin.  That is why comparing a few lenders will give you a good idea on whether the cost for rate is fair.

  • January 06 2011
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Lender all want your business. Get a few Good Faith Estimates from various lenders. It will only take them a few minutes to generate one and you certainly don't have to share all of your informaiton with them in order to get it. Compare and shop!
  • January 06 2011
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Tyler,
   It depends on a few different factors. Are you currently paying points to get the rate that they quoted you? Are you working with a Banker, Broker or federally chartered bank (like a chase for example) and it also depends if the lender is giving you any credit toward your closing costs. If your rate is already locked, then most likely, it is what it is. If you can let us know what rate you are being quoted, the program type that you are doing (FHA, Conventional, USDA, VA) and what your closing costs are, Im sure we can let you know if you are getting a fair deal.
  • January 06 2011
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Tyler..Doesn't hurt to try if you are not locked in yet.  Would help if you had an offer from another lender in order to have some leverage.
  • January 06 2011
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