When the time comes to purchase a new home there is a lot riding on your decision. In many cases you will be making payments for the next 30 years on your home, and you will likely end up living in it for the majority of your life. This is why it is important to do your best to find a good deal when you first search for a home and negotiate for a mortgage. Since purchasing a home is not something that most people do often during their lives, it can be a confusing process and you might think that the process is set in stone. The reality however is that agreeing to the first contract offered to you is not required, and that as the purchaser who will be putting money on the table, so you do have some power over the agreement that is made. By learning to wield your power correctly you can learn to swing the table in your direction and get the best out of your mortgage deal. Here are 6 tricks that have proven successful time and time again in mortgage negotiations
1. Shop around and get multiple mortgage quotes
One of the most important things to do when starting the process of securing a good mortgage deal is to get multiple offers. While this may seem like an obvious piece of advice many Americans still fail to do so. When you do your daily shopping even just for small items you likely compare prices between multiple stores. Mortgage deals should be viewed in the same light (if not more so). With a home purchase you can save thousands of dollars simply by getting multiple offers.
2. Always negotiate mortgage rates
Once you have a few offers in hand then you can start to negotiate with your bank or credit loaner to try and get a better deal. Mortgage rates are always negotiable, and don’t let anybody else tell you otherwise. What is really happening is that the seller would simply get a lower commission if they sell for less. However, a low commission is still better than no commission if you choose to go with a different offer. You can use this to your advantage in order to get a good deal.
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3. Raise your credit to get better offers
Another good plan is to know what your credit score is. If you have good credit and a large down payment to put down you will have an easier time getting lenders to accept your offer. Overall this means more offers and a lower mortgage rate.
4. Ask if you can waive lender fees
In most cases you can waive many of the fees that your lender is asking for. If the bank has been having a hard time selling a home they would rather sell it than not. So even if they cannot get some of their normal rates they will still be inclined to sell. It is always worth at least asking.
5. Discuss escrow agreement for necessary repairs
If you know that repairs will need to be done to the home then don’t hesitate to ask for an escrow to assist with this. The best time to set up this account is during mortgage negotiations as you can make it a part of the deal. With a repair escrow account in place you will not need to worry about extra fees for repairs right as you move in.
Sources used in article:
http://money.usnews.com/money/blogs/my-money/2011/02/15/how- to-negotiate- your-
http://www.treadstonemortgage.com/blog/2012/03/2012-first- time-home- buyers-guide-