Navigating Negotiations: How to Argue for a Lower Mortgage Rate
You know that the price of purchasing a home can be overwhelming, to say the least. That is why many Americans choose to utilize home mortgage offers, which allow them to pay back the costs associated with the purchase over time. As mortgages are taken out in the form of loans, your overall credit history will determine your mortgage rate, which is the percent interest which you will also pay back alongside the loan.
For some individuals, this percentage can be especially high. However, many future homeowners do not know that they can negotiate the initial rate offered. Here are several factors to consider and utilize when negotiating your rates.
One of the first things you can do to lower your rate is to shop around. Getting several rates will give you an idea of who you should be negotiating rates with in the first place. After you’ve narrowed down your options a little, you can take the offered rates in with you and use them to negotiate. Showing a lender that you have other, potentially better offers may persuade them to lower their rate.
Income, Credit Score, and Work History
When it comes time to actually negotiate your mortgage rates on a piece of real estate, start by highlighting your overall income. Combine this argument with your work history and your credit scores. Typically speaking, your credit score will define your overall interest rate. However, the lenders are able to adjust the rates under some circumstances. Your lender is more likely to lower your rate if you can prove that you’re a dependable investment rather than a risky one. So, if you’ve been with the same company for a while or you have a steady and comfortable annual income, point it out to the lender. Bring proof of your average gross and net yearly income. These points may seem minor and they’re not always considered in initial rate building, but they may be a defining factor in your negotiations.
Negotiating with your lender is ultimately the most important aspect of reducing your mortgage rate. If you do not initiate negotiations with your lender or loan officer, you cannot receive a lower mortgage rate. Starting the conversation will allow you to understand what your negotiation options are and explore the types of arguments you may be able to make.
There is always a way to negotiate your mortgage for a lower rate. Speak to your lender so you can know all the details of your loan. That way, you can make the best financial decisions for you and yours.
Anita Ginsberg is a freelance writer from Denver, CO. She studied at Colorado State University, and now writes articles about health, business, family and finance. A mother of two, she enjoys traveling with her family whenever she isn’t writing. You can follow her on Twitter @anitaginsburg
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