How Can I Negotiate For A Low Mortgage Rate?

It is unfortunate that most customers are unaware that they have a negotiating power when it comes to mortgages. Most mortgage lenders are willing to work with borrowers to come to an interest rate that both the lender and borrower are comfortable with. 

As a borrower, you stand a better chance of getting low mortgage interest rates if you have a good credit score. But if your credit score leaves more to be desired, you can still approach a mortgage lender who will help you acquire the best mortgage rate in Montreal. How do you negotiate for a low mortgage rate to acquire your dream home?

Shop around

There are lots of lenders in Canada who are willing to help homebuyers acquire their dream home by offering mortgage loans. If you plan to buy a house, you need to shop around and look into different lending companies and check what they have to offer. Most borrowers make the mistake of obtaining a single mortgage quote from their local banks not realizing that they could get better rates from other lending firms. Once you acquire several quotes from different lenders, compare the associated terms and closing costs to find an offer with better rates. 

Negotiate mortgage fees

Once you identify a lender you are comfortable with, go through their lending terms carefully to ensure you understand them well. Look for any hidden charges and don’t shy away from asking what these charges are for. Some borrowers have hastily signed their mortgage agreements without fully understanding the terms associated only to find that they end paying up more than they had in mind. 

Meet with your lender and negotiate on the terms of the mortgage agreement and make sure that you mention you are considering other lenders as well. 

Lenders are keen to close the deal and they may consider lowering some of the charges associated to encourage you to sign up with them. Find out more about fixed rates vs variable rates and decide which one works best for you. Note that any third party fees included in the agreement are non-negotiable and these are costs incurred towards appraisal, credit reports, inspections and other services.

Negotiating interest rates

As mentioned earlier, it is very easy to get a mortgage with low interest rates if you have a good credit score. Lenders decide on the interest rate they are willing to offer a borrower after looking up their credit report. In as much as it may be hard to negotiate on interest rates, you can still try to work out with your lender to get better terms than the initial offer. If you have a large sum that you can put down as a down payment for your mortgage, this can help to decrease the interest rate. People with bad credit reports can ask their lenders if they are willing to lower the interest rates if the borrower promises to improve their credit scores before signing up.

Working with a mortgage broker

If you are a first time homebuyer, it is normal you may not be familiar with how the real estate operates and how to acquire a low mortgage rate. If you are not sure where you need to begin, it is advisable to work with a mortgage broker. Mortgage brokers know what to look for and what to ask for when negotiating for mortgage rates. They are already aware of charges that are offered by different lending institutions and know which lenders are willing to negotiate on the mortgage terms. Having a mortgage broker will greatly save you time and money to ensure you get the best mortgage deal. 



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