August 7, 2009, Newsletter Issue #179: Negotiating the Lowest Mortgage Rate Possible

Tip of the Week

Many people believe that mortgage rates are static and not subject to negotiation. They couldn't be more wrong. The truth is that most mortgage brokers make their income based on commissions from the loans they originate or sell. Also true is that lending institutions would just as soon get cash up front on a loan than to lend it out over 30 years.

Because of both of these factors, finding the lowest mortgage rate is often a matter of negotiation. When you are working with a mortgage broker, ask about different options to get the lowest mortgage rate. They may suggest a ‘buy down' or a shorter term on the loan. Either of these factors can reduce your rate, but will that get it to the lowest mortgage rate you can find? Maybe not.

Keep asking about incentives, credit worthiness, and other questions regarding lower rates until the broker simply cannot provide any more answers. Once you have gone through this process with one broker, the smartest thing to do if you truly want to get the lowest mortgage rate is to go to another broker. Bring the lowest quote that the first could give you and shop it around to see who can beat it. Shop online as well as locally. Typically, you will have more success online, so check with these websites first and you will get the lowest mortgage rates available.

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