You have options. Remember that. Realizing that you do not have to take the first, second, or even third mortgage loan you’re offered is the most important step in finding the best mortgage loan. Why? Because having options also means that you have room to negotiate.
When looking for the best deal on mortgage loans, it’s crucial that you make as many factors as possible work in your favor. The main factors to negotiate on are: Points, interest rates, lender fees, and inclusion of fees within the overall loan amount. Negotiating in any or all of these areas will decrease your overall monthly loan payment and / or the costs you’ll pay at closing.
After you’ve negotiated with a lender and have the ideal mortgage loan offer, do not just leave the deal as a verbal agreement. Get the details of the mortgage loan offer in writing. It will provide you with a document to refer back to in case the mortgage loan officer develops a sudden and convenient case of “amnesia.” You could also use the document as leverage to negotiate with another mortgage loan lender.
Keep in mind though that getting terms in writing is not a guarantee that you’ll receive the terms you’ve negotiated. The only way to guarantee terms is to request a lock-in, which essentially a contract that insures the terms negotiated for a specific timeframe. This is an option to take only if you’re 100% certain that you’re going to work with a particular lender because you’ll typically incur a fee to lock in mortgage loan terms. Do not do the lock-in if you’re the least bit uncertain about the loan offer or the lender because if interests rates drop, your rate will be frozen at the locked in rate.
